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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Sincerely yours, | |
Richard E. Anthony |
Synovus Financial Corp. | • | Post Office Box 120 | • | Columbus, Georgia 31902-0120 |
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TIME | 10:00 a.m. Thursday, April 27, 2006 | |
PLACE | RiverCenter for the Performing Arts | |
900 Broadway | ||
Columbus, Georgia 31901 | ||
ITEMS OF BUSINESS | (1) To elect seven directors to serve until the 2009 Annual Meeting of Shareholders. | |
(2) To amend the Articles of Incorporation and bylaws to declassify the Board of Directors. | ||
(3) To approve the Synovus Financial Corp. Executive Cash Bonus Plan. | ||
(4) To ratify the appointment of KPMG LLP as Synovus’ independent auditor for the year 2006. | ||
(5) To consider a shareholder proposal regarding director election by majority vote. | ||
(6) To transact such other business as may properly come before the meeting and any adjournment thereof. | ||
WHO MAY VOTE | You can vote if you were a shareholder of record on February 21, 2006. | |
ANNUAL REPORT | A copy of the Annual Report is enclosed. | |
PROXY VOTING | Your vote is important. Please vote in one of these ways: | |
(1) Use the toll-free telephone number shown on the proxy card; | ||
(2) Visit the website listed on your proxy card; | ||
(3) Mark, sign, date and promptly return the enclosed proxy card in the postage-paid envelope provided; or | ||
(4) Submit a ballot at the Annual Meeting. |
G. Sanders Griffith, III | |
Secretary |
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Shareholder Proposal: | |||||
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Appendix A: Director Independence Standards | A-1 | ||||
Appendix B: Director Election by Majority Vote Guidelines | B-1 | ||||
F-1 |
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• | The election of all the director nominees; | |
• | The proposal to amend the Articles of Incorporation and bylaws to declassify the Board of Directors; | |
• | The Synovus Financial Corp. Executive Cash Bonus Plan; and | |
• | The ratification of the appointment of KPMG LLP as Synovus’ independent auditor for the year 2006; |
• | The shareholder proposal regarding director election by majority vote. |
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Vote By Telephone: | |
You can vote your shares by telephone by calling the toll-free telephone number (at no cost to you) shown on your proxy card. Telephone voting is available 24 hours a day, seven days a week.Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions have been properly recorded. Our telephone voting procedures are designed to authenticate the shareholder by using individual control numbers. If you vote by telephone, you do NOT need to return your proxy card. | |
Vote By Internet: | |
You can also choose to vote on the Internet. The website for Internet voting is shown on your proxy card. Internet voting is available 24 hours a day, seven days a week. You will be given the opportunity to confirm that your instructions have been properly recorded, and you can consent to view future proxy statements and annual reports on the Internet instead of receiving them in the mail. If you vote on the Internet, you do NOT need to return your proxy card. | |
Vote By Mail: | |
If you choose to vote by mail, simply mark your proxy card, date and sign it, sign the Certification and return it in the postage-paid envelope provided. |
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Corporate Governance | ||||||
Executive | Audit | and Nominating | Compensation | |||
V. Nathaniel Hansford, Chair | J. Neal Purcell, Chair | Richard Y. Bradley, Chair | V. Nathaniel Hansford, Chair | |||
Richard E. Anthony | Elizabeth W. Camp | Daniel P. Amos | T. Michael Goodrich | |||
James H. Blanchard | John P. Illges, III | Frank W. Brumley | Mason H. Lampton | |||
Richard Y. Bradley | H. Lynn Page | C. Edward Floyd | ||||
Gardiner W. Garrard, Jr. | Melvin T. Stith | Elizabeth C. Ogie | ||||
T. Michael Goodrich | ||||||
Mason H. Lampton | ||||||
J. Neal Purcell | ||||||
James D. Yancey |
• | Monitoring the integrity of Synovus’ financial statements, Synovus’ systems of internal controls and Synovus’ compliance with regulatory and legal requirements; | |
• | Monitoring the independence, qualifications and performance of Synovus’ independent auditor and internal auditing activities; and | |
• | Providing an avenue of communication among the independent auditor, management, internal audit and the Board of Directors. |
• | Identifying qualified individuals to become Board members; | |
• | Recommending to the Board the director nominees for each annual meeting of shareholders and director nominees to be elected by the Board to fill interim director vacancies; | |
• | Overseeing the annual review and evaluation of the performance of the Board and its committees; and | |
• | Developing and recommending to the Board corporate governance guidelines. |
• | Designing and overseeing Synovus’ executive compensation program; | |
• | Designing and overseeing all compensation and benefit programs in which employees and officers of Synovus are eligible to participate; and | |
• | Performing an annual evaluation of the Chief Executive Officer. |
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• | The extent of the director’s/potential director’s business acumen and experience; | |
• | Whether the director/potential director assists in achieving a mix of Board members that represents a diversity of background and experience, including with respect to age, gender, race, place of residence and specialized experience; | |
• | Whether the director/potential director meets the independence requirements of the listing standards of the NYSE; | |
• | Whether the director/potential director would be considered a “financial expert” or “financially literate” as defined in the listing standards of the NYSE; | |
• | Whether the director/potential director, by virtue of particular technical expertise, experience or specialized skill relevant to Synovus’ current or future business, will add specific value as a Board member; and | |
• | Whether the director/potential director possesses a willingness to challenge and stimulate management and the ability to work as part of a team in an environment of trust. |
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Annual retainer | $ | 35,000 | ||
Annual committee member retainer (Compensation and Corporate Governance and Nominating) | $ | 5,000 | ||
Annual committee member retainer (Audit and Executive) | $ | 10,000 | ||
Annual committee chair retainer (Compensation and Corporate Governance and Nominating) | $ | 5,000 | ||
Annual Audit Committee chair retainer | $ | 10,000 | ||
Annual Lead Director retainer | $ | 5,000 |
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Synovus | ||||||||||||||||||||||||
$ Value of | Contribution | |||||||||||||||||||||||
Annual | Total | Director | to Director | |||||||||||||||||||||
Annual | Annual | Committee | Annual | Restricted | Stock | |||||||||||||||||||
Board | Committee | Chair | Cash | Stock | Purchase | |||||||||||||||||||
Name | Retainer | Retainer | Retainer | Retainer | Awards(1) | Plan | ||||||||||||||||||
Daniel P. Amos | $ | 35,000 | $ | 5,000 | — | $ | 40,000 | $ | 13,610 | $ | 10,000 | |||||||||||||
Richard E. Anthony | $ | 35,000 | $ | 10,000 | — | $ | 45,000 | — | $ | 10,000 | ||||||||||||||
James H. Blanchard | $ | 35,000 | $ | 10,000 | — | $ | 45,000 | — | — | |||||||||||||||
Richard Y. Bradley | $ | 35,000 | $ | 15,000 | $ | 5,000 | $ | 55,000 | $ | 13,610 | — | |||||||||||||
Frank W. Brumley | $ | 35,000 | $ | 5,000 | — | $ | 40,000 | $ | 13,610 | $ | 10,000 | |||||||||||||
Elizabeth W. Camp | $ | 35,000 | $ | 10,000 | — | $ | 45,000 | $ | 13,610 | $ | 10,000 | |||||||||||||
C. Edward Floyd | $ | 35,000 | $ | 5,000 | — | $ | 40,000 | $ | 13,610 | $ | 10,000 | |||||||||||||
Gardiner W. Garrard, Jr. | $ | 35,000 | $ | 10,000 | — | $ | 45,000 | $ | 13,610 | — | ||||||||||||||
T. Michael Goodrich | $ | 35,000 | $ | 15,000 | — | $ | 50,000 | $ | 13,610 | $ | 10,000 | |||||||||||||
V. Nathaniel Hansford | $ | 35,000 | $ | 15,000 | $ | 10,000 | (2) | $ | 60,000 | $ | 13,610 | $ | 10,000 | |||||||||||
John P. Illges, III | $ | 35,000 | $ | 20,000 | (3) | $ | 10,000 | (3) | $ | 65,000 | $ | 13,610 | — | |||||||||||
Alfred W. Jones III | $ | 35,000 | — | — | $ | 35,000 | $ | 13,610 | $ | 10,000 | ||||||||||||||
Mason H. Lampton | $ | 35,000 | $ | 15,000 | — | $ | 50,000 | $ | 13,610 | $ | 10,000 | |||||||||||||
Elizabeth C. Ogie | $ | 35,000 | $ | 5,000 | — | $ | 40,000 | $ | 13,610 | — | ||||||||||||||
H. Lynn Page | $ | 35,000 | $ | 10,000 | — | $ | 45,000 | $ | 13,610 | — | ||||||||||||||
J. Neal Purcell | $ | 35,000 | $ | 20,000 | (3) | $ | 10,000 | (3) | $ | 65,000 | $ | 13,610 | $ | 10,000 | ||||||||||
Melvin T. Stith | $ | 35,000 | $ | 10,000 | — | $ | 45,000 | $ | 13,610 | $ | 10,000 | |||||||||||||
William B. Turner, Jr. | $ | 35,000 | — | — | $ | 35,000 | $ | 13,610 | — | |||||||||||||||
James D. Yancey | $ | 35,000 | $ | 10,000 | — | $ | 45,000 | $ | 13,610 | $ | 10,000 |
(1) | Market value of Synovus stock on the grant date, February 1, 2005. |
(2) | Mr. Hansford received $5,000 as an annual retainer for his position as Lead Director. |
(3) | Mr. Illges and Mr. Purcell each served as Chairman of the Audit Committee and as a member of the Executive Committee for a portion of the year. |
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Year | ||||||||||||||
Synovus | First | |||||||||||||
Director | Elected | Principal Occupation and Other | ||||||||||||
Name | Age | Classification | Director | Information | ||||||||||
Daniel P. Amos(1) | 54 | II | 2001 | Chairman of the Board and Chief Executive Officer, Aflac Incorporated (Insurance Holding Company) | ||||||||||
Richard E. Anthony(2) | 59 | II | 1993 | President and Chief Executive Officer, Synovus Financial Corp. | ||||||||||
James H. Blanchard(3) | 64 | I | 1972 | Chairman of the Board, Synovus Financial Corp.; Chairman of the Executive Committee, Total System Services, Inc.; Director, Total System Services, Inc. and BellSouth Corporation | ||||||||||
Richard Y. Bradley | 67 | III | 1991 | Partner, Bradley & Hatcher (Law Firm); Director, Total System Services, Inc. | ||||||||||
Frank W. Brumley(4) | 65 | III | 2004 | Chairman of the Board and Chief Executive Officer, Daniel Island Company (Planned Community Development) | ||||||||||
Elizabeth W. Camp | 54 | III | 2003 | President and Chief Executive Officer, DF Management, Inc. (Investment and Management of Commercial Real Estate) | ||||||||||
C. Edward Floyd, M.D. | 71 | II | 1995 | Vascular Surgeon | ||||||||||
Gardiner W. Garrard, Jr. | 65 | I | 1972 | President, The Jordan Company (Real Estate Development); Director, Total System Services, Inc. | ||||||||||
T. Michael Goodrich | 60 | III | 2004 | Chairman and Chief Executive Officer, BE&K, Inc. (Engineering and Construction Company); Director, Energen Corporation |
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Year | ||||||||||||||
Synovus | First | |||||||||||||
Director | Elected | Principal Occupation and Other | ||||||||||||
Name | Age | Classification | Director | Information | ||||||||||
V. Nathaniel Hansford(5) | 62 | I | 1985 | President, Retired, North Georgia College and State University | ||||||||||
John P. Illges, III | 71 | III | 1997 | Senior Vice President and Financial Consultant, Retired, The Robinson-Humphrey Company, Inc. (Stockbroker); Director, Total System Services, Inc. | ||||||||||
Alfred W. Jones III | 48 | I | 2001 | Chairman of the Board and Chief Executive Officer, Sea Island Company (Real Estate Development and Management); Director, Total System Services, Inc. | ||||||||||
Mason H. Lampton(6) | 58 | II | 1993 | Chairman of the Board, Standard Concrete Products (Construction Materials Company); Director, Total System Services, Inc. | ||||||||||
Elizabeth C. Ogie(7) | 55 | II | 1993 | Private Investor | ||||||||||
H. Lynn Page | 65 | I | 1978 | Director, Total System Services, Inc. | ||||||||||
J. Neal Purcell | 64 | III | 2003 | Vice Chairman, Retired, KPMG LLP (Professional Services Provider); Director, Southern Company, Kaiser Permanente and Dollar General Corporation | ||||||||||
Melvin T. Stith(8) | 59 | II | 1998 | Dean, Martin J. Whitman School of Management, Syracuse University; Director, Flowers Foods, Inc. | ||||||||||
William B. Turner, Jr.(7) | 54 | III | 2003 | Vice Chairman of the Board and President, W.C. Bradley Co. (Metal Manufacturer and Real Estate) |
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Year | ||||||||||||||
Synovus | First | |||||||||||||
Director | Elected | Principal Occupation and Other | ||||||||||||
Name | Age | Classification | Director | Information | ||||||||||
James D. Yancey(9) | 64 | I | 1978 | Chairman of the Board, Columbus Bank and Trust Company; Chairman of the Board, Retired, Synovus Financial Corp.; Director, Total System Services, Inc. |
(1) | Daniel P. Amos previously served as a director of Synovus from 1991 until 1998, when he resigned as a director as required by federal banking regulations to join the board of a company affiliated with a Japanese bank. |
(2) | Richard E. Anthony was elected President and Chief Executive Officer of Synovus in July 2005. From 1995 until 2005, Mr. Anthony served in various capacities with Synovus, including President and Chief Operating Officer of Synovus. |
(3) | James H. Blanchard was elected Chairman of the Board of Synovus in July 2005. From 1970 until 2005, Mr. Blanchard served in various capacities with Synovus, CB&T and/or TSYS, including Chief Executive Officer of Synovus. |
(4) | Frank W. Brumley was elected Chairman of the Board and Chief Executive Officer of Daniel Island Company in January 2006. Prior to 2006, Mr. Brumley served as President of Daniel Island Company. |
(5) | V. Nathaniel Hansford serves as Lead Director of the Synovus Board. |
(6) | Mason H. Lampton was elected Chairman of the Board of Standard Concrete Products in June 2005. Prior to 2005, Mr. Lampton served as President and Chief Executive Officer of Standard Concrete Products. |
(7) | Elizabeth C. Ogie is William B. Turner, Jr.’s first cousin. |
(8) | Melvin T. Stith was appointed Dean of Syracuse University’s Martin J. Whitman School of Management in January 2005. Prior to 2005, Mr. Stith served as Dean of the College of Business at Florida State University. |
(9) | James D. Yancey retired as an executive employee of Synovus in December 2004 and served as a non-executive Chairman of the Board until July 2005. Mr. Yancey was elected Chairman of the Board of Synovus in October 2003. Prior to 2003, Mr. Yancey served in various capacities with Synovus and/or CB&T, including Vice Chairman of the Board and President of both Synovus and CB&T. |
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Each member of the Board of Directors of the corporation shall be elected at the annual meeting of shareholders and shall hold office for a term of one year and until his or her successor is duly elected and qualified or until his or her earlier retirement, resignation, removal or death.” |
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Name and Position | Dollar Value ($) | |||
Richard E. Anthony President and Chief Executive Officer | $ | 964,575 | ||
James H. Blanchard Chairman of the Board | 1,114,800 | |||
G. Sanders Griffith, III Senior Executive Vice President, General Counsel and Secretary | 417,375 | |||
Frederick L. Green, III Vice Chairman | 376,950 | |||
Elizabeth R. James Vice Chairman and Chief People Officer | 371,700 | |||
Executive Group | 3,245,400 | |||
Non-Executive Director Group | -0- | |||
Non-Executive Officer Employee Group | -0- |
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Name | Age | Position with Synovus | ||||
Richard E. Anthony(1) | 59 | President and Chief Executive Officer | ||||
James H. Blanchard(1) | 64 | Chairman of the Board | ||||
Frederick L. Green, III(2) | 47 | Vice Chairman | ||||
Elizabeth R. James(3) | 44 | Vice Chairman and Chief People Officer | ||||
G. Sanders Griffith, III(4) | 52 | Senior Executive Vice President, General Counsel and Secretary | ||||
Thomas J. Prescott(5) | 51 | Executive Vice President and Chief Financial Officer | ||||
Mark G. Holladay(6) | 50 | Executive Vice President and Chief Credit Officer | ||||
Andrew R. Klepchick(7) | 43 | Executive Vice President | ||||
Calvin Smyre(8) | 58 | Executive Vice President, Corporate Affairs |
(1) | As Messrs. Blanchard and Anthony are directors of Synovus, relevant information pertaining to their positions with Synovus is set forth under the caption “Members of the Board of Directors” on page 10. |
(2) | Frederick L. Green, III was elected Vice Chairman of Synovus in December 2003. From 1991 until 2003, Mr. Green served in various capacities with The National Bank of South Carolina, a banking subsidiary of Synovus, including President of The National Bank of South Carolina. Mr. Green continues to serve as Chairman of the Board of The National Bank of South Carolina. |
(3) | Elizabeth R. James was elected Vice Chairman of Synovus in May 2000. From 1986 until 2000, Ms. James served in various capacities with Synovus, CB&T and/or TSYS, including Chief Information Officer and Chief People Officer of Synovus. |
(4) | G. Sanders Griffith, III was elected Senior Executive Vice President, General Counsel and Secretary of Synovus in October 1995. From 1988 until 1995, Mr. Griffith served in various capacities with Synovus, including Executive Vice President, General Counsel and Secretary. |
(5) | Thomas J. Prescott was elected Executive Vice President and Chief Financial Officer of Synovus in December 1996. From 1987 until 1996, Mr. Prescott served in various capacities with Synovus, including Executive Vice President and Treasurer. |
(6) | Mark G. Holladay was elected Executive Vice President and Chief Credit Officer of Synovus in April 2000. From 1974 until 2000, Mr. Holladay served in various capacities with CB&T, including Executive Vice President. |
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(7) | Andrew R. Klepchick was elected Executive Vice President of Synovus in August 2005. From 1988 until 2005, Mr. Klepchick served in various positions with Creative Financial Group, Ltd., a financial planning subsidiary of Synovus, including Executive Vice President of Creative Financial Group, Ltd. |
(8) | Calvin Smyre was elected Executive Vice President of Synovus in November 1996. From 1976 until 1996, Mr. Smyre served in various capacities with CB&T and/or Synovus, including Senior Vice President of Synovus. |
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Shares of | Shares of | Shares of | ||||||||||||||||||
Synovus | Synovus | Synovus | Percentage | |||||||||||||||||
Stock | Stock | Stock | of | |||||||||||||||||
Beneficially | Beneficially | Beneficially | Outstanding | |||||||||||||||||
Owned with | Owned with | Owned with | Total Shares | Shares of | ||||||||||||||||
Sole Voting | Shared Voting | Sole Voting | of Synovus | Synovus | ||||||||||||||||
And | And | but no | Stock | Stock | ||||||||||||||||
Investment | Investment | Investment | Beneficially | Beneficially | ||||||||||||||||
Power as of | Power as of | Power as of | Owned as of | Owned as of | ||||||||||||||||
Name | 12/31/05 | 12/31/05 | 12/31/05 | 12/31/05(1) | 12/31/05 | |||||||||||||||
Daniel P. Amos | 51,122 | 417,274 | 500 | 468,896 | * | |||||||||||||||
Richard E. Anthony | 584,394 | 189,774 | 64,238 | 1,143,689 | * | |||||||||||||||
James H. Blanchard | 1,336,597 | 203,815 | 49,687 | 2,904,517 | 1 | |||||||||||||||
Richard Y. Bradley | 23,124 | 84,887 | 500 | 108,511 | * | |||||||||||||||
Frank W. Brumley | 25,609 | — | 500 | 26,109 | * | |||||||||||||||
Elizabeth W. Camp | 22,901 | 2,703 | 500 | 26,104 | * | |||||||||||||||
C. Edward Floyd | 846,471 | 269,365 | 500 | 1,116,336 | * | |||||||||||||||
Gardiner W. Garrard, Jr. | 204,147 | 793,682 | 500 | 998,329 | * | |||||||||||||||
T. Michael Goodrich | 186,284 | 35,898 | (2) | 500 | 222,682 | * | ||||||||||||||
Frederick L. Green, III | 104,939 | 415 | 30,784 | 277,452 | * | |||||||||||||||
G. Sanders Griffith, III | 200,770 | 3,424 | 71,879 | 485,261 | * | |||||||||||||||
V. Nathaniel Hansford | 124,749 | 424,239 | 500 | 549,488 | * | |||||||||||||||
John P. Illges, III | 281,204 | 441,429 | 500 | 723,133 | * | |||||||||||||||
Elizabeth R. James | 32,997 | — | 4,754 | 148,646 | * | |||||||||||||||
Alfred W. Jones III | 10,079 | — | 500 | 10,579 | * | |||||||||||||||
Mason H. Lampton | 97,020 | 178,981 | (3) | 500 | 276,501 | * | ||||||||||||||
Elizabeth C. Ogie | 477,263 | 3,001,567 | (4) | 500 | 3,479,330 | 1 | ||||||||||||||
H. Lynn Page | 721,418 | 11,515 | 500 | 733,433 | * | |||||||||||||||
J. Neal Purcell | 10,309 | — | 500 | 10,809 | * | |||||||||||||||
Melvin T. Stith | 8,205 | 117 | 500 | 8,822 | * | |||||||||||||||
William B. Turner, Jr. | 418,244 | 2,867,526 | (4) | 500 | 3,286,270 | 1 | ||||||||||||||
James D. Yancey | 1,110,591 | 88,532 | 500 | 2,680,785 | 1 | |||||||||||||||
Directors and Executive Officers as a Group (26 persons) | 7,088,483 | 6,155,802 | 255,438 | 17,384,192 | 5.5 |
* | Less than one percent of the outstanding shares of Synovus stock. |
(1) | The totals shown for the following directors and executive officers of Synovus include the number of shares of Synovus stock that each individual, as of December 31, 2005, had the right to acquire within 60 days through the exercise of stock options: |
Person | Number of Shares | |||
Richard E. Anthony | 305,283 | |||
James H. Blanchard | 1,314,418 | |||
Frederick L. Green, III | 141,314 | |||
G. Sanders Griffith, III | 209,188 | |||
Elizabeth R. James | 110,895 | |||
James D. Yancey | 1,481,162 |
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In addition, the other executive officers of Synovus had rights to acquire an aggregate of 322,209 shares of Synovus stock within 60 days through the exercise of stock options. | |
(2) | Includes 31,298 shares of Synovus stock held in trusts for which Mr. Goodrich is not the trustee. Mr. Goodrich disclaims beneficial ownership of such shares. |
(3) | Includes 176,187 shares of Synovus stock held in a trust for which Mr. Lampton is not the trustee. Mr. Lampton disclaims beneficial ownership of such shares. |
(4) | Includes 2,859,341 shares of Synovus stock held by a charitable foundation of which Mrs. Ogie and Mr. Turner are among the trustees. |
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• | Reviewed and discussed with management and KPMG LLP Synovus’ audited consolidated financial statements as of and for the year ended December 31, 2005; | |
• | Discussed with KPMG LLP the matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees); and | |
• | Received from KPMG LLP the written disclosures and the letter required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees) and has discussed with KPMG LLP their independence. |
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2005 | 2004 | |||||||
Audit Fees(1) | $ | 2,993,000 | $ | 2,994,000 | ||||
Audit Related Fees(2) | 1,331,000 | 1,719,000 | ||||||
Tax Fees(3) | 355,000 | 416,000 | ||||||
All Other Fees(4) | -0- | 52,000 | ||||||
Total | $ | 4,679,000 | $ | 5,181,000 | ||||
(1) | Audit fees represent fees for professional services provided in connection with the audits of Synovus’ consolidated financial statements and management’s assessment of the effectiveness of internal control over financial reporting, reviews of quarterly financial statements, issuance of comfort letters and other SEC filing matters and audit or attestation services provided in connection with other statutory or regulatory filings. |
(2) | Audit related fees consisted principally of fees for certain agreed upon procedures engagements, certain internal control reports, employee benefit plan audits and due diligence services related to acquisitions. |
(3) | Tax fees consisted of fees for tax compliance/preparation ($88,000 in 2005) and tax consultation ($267,000 in 2005) services. |
(4) | All other fees consisted principally of certain agreed upon procedures related to computer security. |
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Long-Term | |||||||||||||||||||||||||||||
Annual Compensation | Compensation Awards | ||||||||||||||||||||||||||||
Other | Restricted | ||||||||||||||||||||||||||||
Annual | Stock | Securities | All Other | ||||||||||||||||||||||||||
Compensation | Award(s) | Underlying | Compensation | ||||||||||||||||||||||||||
Name and Principal Position | Year | Salary | Bonus | (1) | (2) | Options/SARs | (3) | ||||||||||||||||||||||
Richard E. Anthony | 2005 | $ | 643,050 | $ | 964,575 | $ | 10,000 | $ | 1,700,000 | 57,047 | $ | 263,658 | |||||||||||||||||
President and Chief | 2004 | 510,000 | 510,000 | 10,000 | -0- | 45,620 | 113,369 | ||||||||||||||||||||||
Executive Officer | 2003 | 441,606 | 66,092 | 10,000 | -0- | -0- | 81,806 | ||||||||||||||||||||||
James H. Blanchard | 2005 | 743,200 | 1,114,800 | -0- | -0- | 90,716 | 331,830 | ||||||||||||||||||||||
Chairman of the Board | 2004 | 811,000 | 811,000 | -0- | -0- | 89,300 | 196,816 | ||||||||||||||||||||||
2003 | 765,000 | -0- | 5,000 | -0- | -0- | 179,457 | |||||||||||||||||||||||
G. Sanders Griffith, III | 2005 | 397,500 | 417,375 | -0- | 143,246 | 16,023 | 99,735 | ||||||||||||||||||||||
Senior Executive Vice | 2004 | 382,000 | 267,400 | -0- | -0- | 31,518 | 61,039 | ||||||||||||||||||||||
President, General | 2003 | 360,000 | 49,140 | -0- | -0- | -0- | 44,774 | ||||||||||||||||||||||
Counsel and Secretary | |||||||||||||||||||||||||||||
Frederick L. Green, III | 2005 | 359,000 | 376,950 | 5,000 | 825,627 | 14,052 | 139,025 | ||||||||||||||||||||||
Vice Chairman | 2004 | 335,000 | 234,500 | -0- | -0- | 16,782 | 197,851 | ||||||||||||||||||||||
2003 | 280,000 | 41,623 | -0- | -0- | -0- | 89,025 | |||||||||||||||||||||||
Elizabeth R. James | 2005 | 354,000 | 371,700 | 5,000 | 127,502 | 14,262 | 123,800 | ||||||||||||||||||||||
Vice Chairman | 2004 | 340,000 | 238,000 | -0- | -0- | 28,016 | 86,511 | ||||||||||||||||||||||
and Chief People Officer | 2003 | 320,000 | 43,680 | -0- | -0- | -0- | 66,944 |
(1) | Amount for 2005 includes matching contributions under the Synovus Director Stock Purchase Plan of $10,000 for Mr. Anthony and $5,000 each for Mr. Green and Ms. James. Perquisites and other personal benefits are excluded because the aggregate amount does not exceed the lesser of $50,000 or 10% of annual salary and bonus for the named executives. |
(2) | On January 21, 2005, 63,386 shares of restricted stock were granted to Mr. Anthony with a performance-based vesting schedule. The restricted shares have seven 1-year performance periods (2005-2011) during which the Compensation Committee establishes an earnings per share goal and, if such goal is attained during any performance period, 20% of the restricted shares will vest. On January 21, 2005, 26,100 restricted shares were granted to Mr. Green which vest as follows: 20% on January 21, 2006, 2007, 2008, 2009 and 2010. As of December 31, 2005, Mr. Anthony held 64,238 restricted shares with a value of $1,735,068, Mr. Griffith held 5,341 restricted shares with a value of $144,260, Mr. Green held 30,784 restricted shares with a value of $831,476 and Ms. James held 4,754 restricted shares with a value of $128,406. Dividends are paid on all restricted shares. |
(3) | The 2005 amount includes director fees of $98,700, $90,700, $50,000 and $35,000 for Messrs. Blanchard, Anthony and Green and Ms. James, respectively, in connection with their service as directors and/or advisory directors of Synovus and certain of its subsidiaries; contributions or other allocations to defined contribution plans of $31,500 for each executive; and allocations pursuant to defined contribution excess benefit agreements of $201,630, $141,458, $68,235, $57,525 and $57,300 for each of Messrs. Blanchard, Anthony, Griffith and Green and Ms. James, respectively. |
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Individual Grants | ||||||||||||||||||||||||
% of Total | ||||||||||||||||||||||||
Options | Potential Realized Value at | |||||||||||||||||||||||
SARs | Assumed Annual Rates of | |||||||||||||||||||||||
Options/ | Granted to | Exercise | Stock Price Appreciation | |||||||||||||||||||||
SARs | Employees | or Base | For Option Term(1) | |||||||||||||||||||||
Granted | in Fiscal | Price | Expiration | |||||||||||||||||||||
Name | (#) | Year | ($/Share) | Date | 5%($) | 10%($) | ||||||||||||||||||
Richard E. Anthony | 57,047 | (2) | 2.2 | % | $ | 26.82 | 1/20/2015 | $ | 962,209 | $ | 2,438,427 | |||||||||||||
James H. Blanchard | 90,716 | (2) | 3.6 | 26.82 | 1/20/2015 | 1,530,103 | 3,877,580 | |||||||||||||||||
G. Sanders Griffith, III | 16,023 | (2) | 0.6 | 26.82 | 1/20/2015 | 270,259 | 684,890 | |||||||||||||||||
Frederick L. Green, III | 14,052 | (2) | 0.6 | 26.82 | 1/20/2015 | 237,014 | 600,641 | |||||||||||||||||
Elizabeth R. James | 14,262 | (2) | 0.6 | 26.82 | 1/20/2015 | 240,556 | 609,617 |
(1) | The dollar gains under these columns result from calculations using the identified growth rates and are not intended to forecast future price appreciation of Synovus stock. |
(2) | Options granted on January 21, 2005 at fair market value. Options become exercisable on January 21, 2008. Options are transferable to family members. |
Number of Securities | Value of | |||||||||||||||||||||||
Underlying Unexercised | Unexercised In-the-Money | |||||||||||||||||||||||
Options/SARs at | Options/SARs at | |||||||||||||||||||||||
Shares | Value | FY-End(#) | FY-End($)(1) | |||||||||||||||||||||
Acquired on | Realized | |||||||||||||||||||||||
Name | Exercise(#) | ($)(1) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Richard E. Anthony | -0- | -0- | 259,663 | 502,667 | $ | 1,516,556 | $ | 3,799,601 | ||||||||||||||||
James H. Blanchard | -0- | -0- | 1,225,118 | 1,680,016 | 9,684,688 | 13,081,586 | ||||||||||||||||||
G. Sanders Griffith, III | 254,480 | $ | 2,923,997 | 177,670 | 447,541 | 840,357 | 3,773,333 | |||||||||||||||||
Frederick L. Green, III | 56,250 | 988,081 | 114,532 | 40,834 | 543,249 | 45,454 | ||||||||||||||||||
Elizabeth R. James | 23,076 | 198,596 | 82,879 | 442,278 | 312,555 | 3,768,411 |
(1) | Market value of underlying securities at exercise or year-end, minus the exercise or base price. |
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• | Three times the executive’s current base salary and bonus (bonus is defined as the average bonus over the past three years measured as a percentage multiplied by the executive’s current base salary); | |
• | Three years of medical, life, disability and other welfare benefits; and | |
• | A pro rata bonus through the date of termination for the separation year. |
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2000 | 2001 | 2002 | 2003 | 2004 | 2005 | ||||||||||||||||||||||||||
Synovus | $ | 100 | $ | 95 | $ | 75 | $ | 115 | $ | 117 | $ | 114 | |||||||||||||||||||
S&P 500 | $ | 100 | $ | 88 | $ | 69 | $ | 88 | $ | 98 | $ | 103 | |||||||||||||||||||
KBW 50 | $ | 100 | $ | 96 | $ | 89 | $ | 119 | $ | 131 | $ | 133 |
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• | Base Salary | |
• | Annual Bonus | |
• | Long-Term Incentives |
30
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Shares of Synovus Stock | Percentage of Outstanding Shares of | |||||||
Beneficially Owned | Synovus Stock Beneficially Owned | |||||||
Name and Address of Beneficial Owner | as of 12/31/05 | as of 12/31/05 | ||||||
Synovus Trust Company, N.A.(1) | 50,206,073 | (2) | 16.1 | % | ||||
1148 Broadway | ||||||||
Columbus, Georgia 31901 |
(1) | The shares of Synovus stock held by Synovus Trust Company are voted by the President of Synovus Trust Company. |
(2) | As of December 31, 2005, the banking, brokerage, investment advisory and trust company subsidiaries of Synovus, including CB&T through its wholly owned subsidiary, Synovus Trust Company, held in various fiduciary or advisory capacities a total of 50,227,188 shares of Synovus stock as to which they possessed sole or shared voting or investment power. Of this total, Synovus Trust Company held 45,947,817 shares as to which it possessed sole investment power, 42,856,998 shares as to which it possessed sole voting power, 708,071 shares as to which it possessed shared voting power and 3,511,840 shares as to which it possessed shared investment power. The other banking, brokerage, investment advisory and trust subsidiaries of Synovus held 21,115 shares as to which they possessed sole investment power. Synovus and its subsidiaries disclaim beneficial ownership of all shares of Synovus stock which are held by them in various fiduciary, advisory, non-advisory or agency capacities. |
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Shares of TSYS Stock | Percentage of Outstanding Shares of | |||||||
Beneficially Owned | TSYS Stock Beneficially Owned | |||||||
Name and Address of Beneficial Owner | as of 12/31/05 | as of 12/31/05 | ||||||
Columbus Bank and Trust Company | 159,630,980(1)(2) | 81 | % | |||||
1148 Broadway Columbus, Georgia 31901 |
(1) | CB&T individually owns these shares. |
(2) | As of December 31, 2005, Synovus Trust Company, N.A. and the other banking, brokerage, investment advisory and trust company subsidiaries of Synovus held in various fiduciary or advisory capacities a total of 3,116,723 shares (1.6%) of TSYS stock. Of this total, Synovus Trust Company held 2,763,470 shares as to which it possessed sole voting power, 2,751,441 shares as to which it possessed sole investment power, 270,328 shares as to which it possessed shared voting power and 359,624 shares as to which it possessed shared investment power. The other banking, brokerage, investment advisory and trust subsidiaries of Synovus held 5,658 shares as to which they possessed sole investment power. Synovus and its subsidiaries disclaim beneficial ownership of all shares of TSYS stock which are held by them in various fiduciary, advisory, non-advisory and agency capacities. |
Shares of | Shares of | |||||||||||||||||||
Shares of | TSYS Stock | TSYS Stock | ||||||||||||||||||
TSYS Stock | Beneficially | Beneficially | Percentage of | |||||||||||||||||
Beneficially | Owned with | Owned with | Total | Outstanding | ||||||||||||||||
Owned with | Shared | Sole Voting | Shares of | Shares of | ||||||||||||||||
Sole Voting | Voting and | and No | TSYS Stock | TSYS Stock | ||||||||||||||||
and Investment | Investment | Investment | Beneficially | Beneficially | ||||||||||||||||
Power as of | Power as of | Power as of | Owned as of | Owned as of | ||||||||||||||||
Name | 12/31/05 | 12/31/05 | 12/31/05 | 12/31/05 | 12/31/05 | |||||||||||||||
Daniel P. Amos | — | 820,800 | — | 820,800 | * | |||||||||||||||
Richard E. Anthony | — | — | — | — | — | |||||||||||||||
James H. Blanchard | 669,569 | 360,480 | — | 1,030,049 | 1 | |||||||||||||||
Richard Y. Bradley | 24,803 | 5,000 | 500 | 30,303 | * | |||||||||||||||
Frank W. Brumley | 10,000 | — | — | 10,000 | * | |||||||||||||||
Elizabeth W. Camp | — | — | — | — | — |
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Shares of | Shares of | |||||||||||||||||||
Shares of | TSYS Stock | TSYS Stock | ||||||||||||||||||
TSYS Stock | Beneficially | Beneficially | Percentage of | |||||||||||||||||
Beneficially | Owned with | Owned with | Total | Outstanding | ||||||||||||||||
Owned with | Shared | Sole Voting | Shares of | Shares of | ||||||||||||||||
Sole Voting | Voting and | and No | TSYS Stock | TSYS Stock | ||||||||||||||||
and Investment | Investment | Investment | Beneficially | Beneficially | ||||||||||||||||
Power as of | Power as of | Power as of | Owned as of | Owned as of | ||||||||||||||||
Name | 12/31/05 | 12/31/05 | 12/31/05 | 12/31/05 | 12/31/05 | |||||||||||||||
C. Edward Floyd | 20,000 | — | — | 20,000 | * | |||||||||||||||
Gardiner W. Garrard, Jr. | 22,421 | — | 500 | 22,921 | * | |||||||||||||||
T. Michael Goodrich | — | — | — | — | — | |||||||||||||||
Frederick L. Green, III | — | 138 | — | 138 | ||||||||||||||||
G. Sanders Griffith, III | 2,688 | — | 16,734 | 19,422 | * | |||||||||||||||
V. Nathaniel Hansford | 1,592 | — | — | 1,592 | * | |||||||||||||||
John P. Illges, III | 104,589 | 81,750 | 500 | 186,839 | * | |||||||||||||||
Elizabeth R. James | 16,999 | — | — | 16,999 | * | |||||||||||||||
Alfred W. Jones III | 6,419 | — | 500 | 6,919 | * | |||||||||||||||
Mason H. Lampton | 77,768 | 30,614 | 500 | 108,882 | * | |||||||||||||||
Elizabeth C. Ogie | 7,200 | 45,290 | — | 52,490 | * | |||||||||||||||
H. Lynn Page | 316,623 | 131,146 | 500 | 448,269 | * | |||||||||||||||
J. Neal Purcell | 1,000 | — | — | 1,000 | * | |||||||||||||||
Melvin T. Stith | — | — | — | — | — | |||||||||||||||
William B. Turner, Jr. | — | 576,000 | — | 576,000 | * | |||||||||||||||
James D. Yancey | 609,176 | 42,730 | 500 | 733,406 | * | |||||||||||||||
Directors and Executive Officers as a Group (26 persons) | 1,974,012 | 2,093,948 | 20,234 | 4,088,194 | 2.1 |
* | Less than one percent of the outstanding shares of TSYS stock. |
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• | Only one annual report and proxy statement will be delivered to multiple shareholders sharing an address unless you notify your broker or bank to the contrary; | |
• | You can contact Synovus by calling (706) 649-5220 or by writing Director of Investor Relations, Synovus Financial Corp., P.O. Box 120, Columbus, Georgia 31902 to request a separate copy of the annual report and proxy statement for the 2006 Annual Meeting and for future meetings or you can contact your bank or broker to make a similar request; and | |
• | You can request delivery of a single copy of annual reports or proxy statements from your bank or broker if you share the same address as another Synovus shareholder and your bank or broker has determined to household proxy materials. |
Richard E. Anthony | |
President and Chief Executive Officer |
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• | The director is, or has been within the last three years, an employee of the Company or an immediate family member is, or has been within the last three years, an executive officer of the Company. | |
• | The director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $100,000 in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service). (Compensation received by an immediate family member for service as an employee of the Company (other than an executive officer) is not taken into consideration under this independence standard). | |
• | (A) The director or an immediate family member is a current partner of a firm that is the Company’s internal or external auditor; (B) the director is a current employee of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and who participates in the firm’s audit, assurance or tax compliance (but not tax planning) practice; or (D) the director or an immediate family member was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on the Company’s audit within that time. | |
• | The director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of the Company’s present executive officers at the same time serves or served on that company’s compensation committee. | |
• | The director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues. |
• | The director is a current employee, or an immediate family member of the director is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services (including financial services) in an amount which, in the prior fiscal year, is less than the greater of $1 million, or 2% of such other company’s consolidated gross revenues. (In the event this threshold is exceeded, and where applicable in the standards set forth below, the three year “look back” period referenced above will apply to future independence determinations). | |
• | The director or an immediate family member of the director is a partner of a law firm that provides legal services to the Company and the fees paid to such law firm by the Company |
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in the prior fiscal year were less than the greater of $1 million, or 2% of the law firm’s total revenues. | ||
• | The director or an immediate family member of the director is an executive officer of a tax exempt organization and the Company’s contributions to the organization in the prior fiscal year were less than the greater of $1 million, or 2% of the organization’s consolidated gross revenues. | |
• | The director received less than $100,000 in direct compensation from the Company during the prior twelve month period, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service). | |
• | The director’s immediate family member received in his or her capacity as an employee of the Company (other than as an executive officer of the Company), less than $250,000 in direct compensation from the Company in the prior fiscal year, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service). | |
• | The director or an immediate family member of the director has, directly, in his or her individual capacities, or, indirectly, in his or her capacity as the owner of an equity interest in a company of which he or she is not an employee, lending relationships, deposit relationships or other banking relationships (such as depository, trusts and estates, private banking, investment banking, investment management, custodial, securities brokerage, insurance, cash management and similar services) with the Company provided that: |
1) | Such relationships are in the ordinary course of business of the Company and are on substantially the same terms as those prevailing at the time for comparable transactions with non-affiliated persons; and | |
2) | With respect to extensions of credit by the Company’s subsidiaries: |
(a) | such extensions of credit have been made in compliance with applicable law, including Regulation O of the Board of Governors of the Federal Reserve, Sections 23A and 23B of the Federal Reserve Act and Section 13(k) of the Securities Exchange Act of 1934; and | |
(b) | no event of default has occurred under the extension of credit. |
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B-1
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-40 | ||||
F-41 | ||||
F-42 | ||||
F-43 | ||||
F-44 | ||||
F-82 |
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(In thousands, except share data) | |||||||||||
December 31, | |||||||||||
2005 | 2004 | ||||||||||
ASSETS | |||||||||||
Cash and due from banks, including $49,659 and $36,977 in 2005 and 2004, respectively, on deposit to meet Federal Reserve requirements | $ | 880,886 | 683,035 | ||||||||
Interest earning deposits with banks | 2,980 | 4,153 | |||||||||
Federal funds sold and securities purchased under resale agreements | 68,922 | 135,471 | |||||||||
Trading account assets (note 3) | 27,322 | — | |||||||||
Mortgage loans held for sale | 143,144 | 120,186 | |||||||||
Investment securities available for sale (note 4) | 2,958,320 | 2,695,593 | |||||||||
Loans, net of unearned income (note 5) | 21,392,347 | 19,480,396 | |||||||||
Allowance for loan losses (note 5) | (289,612 | ) | (265,745 | ) | |||||||
Loans, net | 21,102,735 | 19,214,651 | |||||||||
Premises and equipment, net | 669,425 | 638,407 | |||||||||
Contract acquisition costs and computer software, net (note 6) | 431,849 | 401,074 | |||||||||
Goodwill, net (notes 2 and 18) | 458,382 | 416,283 | |||||||||
Other intangible assets, net (notes 2 and 7) | 44,867 | 41,628 | |||||||||
Other assets (notes 7 and 17) | 831,840 | 699,697 | |||||||||
Total assets | $ | 27,620,672 | 25,050,178 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Liabilities: | |||||||||||
Deposits: | |||||||||||
Non-interest bearing retail and commercial deposits | $ | 3,700,750 | 3,337,908 | ||||||||
Interest bearing retail and commercial deposits (note 8) | 14,798,845 | 12,948,523 | |||||||||
Total retail and commercial deposits | 18,499,595 | 16,286,431 | |||||||||
Brokered time deposits (note 8) | 2,284,770 | 2,291,037 | |||||||||
Total deposits | 20,784,365 | 18,577,468 | |||||||||
Federal funds purchased and securities sold under repurchase agreements (note 9) | 1,158,669 | 1,208,080 | |||||||||
Long-term debt (note 9) | 1,933,638 | 1,879,583 | |||||||||
Other liabilities (note 17) | 597,698 | 576,474 | |||||||||
Total liabilities | 24,474,370 | 22,241,605 | |||||||||
Minority interest in consolidated subsidiaries | 196,973 | 167,284 | |||||||||
Shareholders’ equity (notes 2, 13, and 15): | |||||||||||
Common stock — $1.00 par value. Authorized 600,000,000 shares; issued 318,301,275 in 2005 and 315,636,047 in 2004; outstanding 312,639,737 in 2005 and 309,974,509 in 2004 | 318,301 | 315,636 | |||||||||
Surplus | 686,447 | 628,396 | |||||||||
Treasury stock — 5,661,538 shares | (113,944 | ) | (113,944 | ) | |||||||
Unearned compensation | (3,126 | ) | (106 | ) | |||||||
Accumulated other comprehensive income (loss) | (29,536 | ) | 8,903 | ||||||||
Retained earnings | 2,091,187 | 1,802,404 | |||||||||
Total shareholders’ equity | 2,949,329 | 2,641,289 | |||||||||
Commitments and contingencies (note 12) | |||||||||||
Total liabilities and shareholders’ equity | $ | 27,620,672 | 25,050,178 | ||||||||
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(In thousands, except per share data) | ||||||||||||||||
Years Ended December 31, | ||||||||||||||||
2005 | 2004 | 2003 | ||||||||||||||
Interest income: | ||||||||||||||||
Loans, including fees | $ | 1,375,227 | 1,051,117 | 951,584 | ||||||||||||
Investment securities available for sale: | ||||||||||||||||
U.S. Treasury and U.S. Government agency securities | 53,037 | 45,184 | 50,959 | |||||||||||||
Mortgage-backed securities | 40,287 | 38,731 | 29,345 | |||||||||||||
State and municipal securities | 10,072 | 10,786 | 11,248 | |||||||||||||
Other investments | 5,402 | 4,644 | 3,423 | |||||||||||||
Trading account assets | 642 | — | — | |||||||||||||
Mortgage loans held for sale | 7,304 | 6,581 | 13,361 | |||||||||||||
Federal funds sold and securities purchased under resale agreements | 4,082 | 1,945 | 1,547 | |||||||||||||
Interest earning deposits with banks | 172 | 32 | 25 | |||||||||||||
Total interest income | 1,496,225 | 1,159,020 | 1,061,492 | |||||||||||||
Interest expense: | ||||||||||||||||
Deposits (note 8) | 407,305 | 216,284 | 217,561 | |||||||||||||
Federal funds purchased and securities sold under repurchase agreements | 31,569 | 19,286 | 11,830 | |||||||||||||
Long-term debt | 88,504 | 62,771 | 69,037 | |||||||||||||
Total interest expense | 527,378 | 298,341 | 298,428 | |||||||||||||
Net interest income | 968,847 | 860,679 | 763,064 | |||||||||||||
Provision for losses on loans (note 5) | 82,532 | 75,319 | 71,777 | |||||||||||||
Net interest income after provision for losses on loans | 886,315 | 785,360 | 691,287 | |||||||||||||
Non-interest income: | ||||||||||||||||
Electronic payment processing services | 867,914 | 755,267 | 701,022 | |||||||||||||
Merchant services | 237,418 | 26,169 | — | |||||||||||||
Other transaction processing services revenue | 183,412 | 170,905 | 120,485 | |||||||||||||
Service charges on deposit accounts | 112,788 | 121,450 | 107,697 | |||||||||||||
Fiduciary and asset management fees | 44,886 | 43,001 | 39,377 | |||||||||||||
Brokerage and investment banking revenue | 24,487 | 21,748 | 20,461 | |||||||||||||
Mortgage banking income | 28,682 | 26,300 | 58,633 | |||||||||||||
Bankcard fees | 37,638 | 30,174 | 25,751 | |||||||||||||
Securities gains, net (note 4) | 463 | 75 | 2,491 | |||||||||||||
Other fee income | 32,914 | 29,227 | 23,682 | |||||||||||||
Other operating income (note 20) | 35,597 | 67,157 | 44,565 | |||||||||||||
Non-interest income before reimbursable items | 1,606,199 | 1,291,473 | 1,144,164 | |||||||||||||
Reimbursable items | 312,280 | 229,538 | 225,165 | |||||||||||||
Total non-interest income | 1,918,479 | 1,521,011 | 1,369,329 | |||||||||||||
Non-interest expense: | ||||||||||||||||
Salaries and other personnel expense (notes 14 and 15) | 836,371 | 731,579 | 672,248 | |||||||||||||
Net occupancy and equipment expense (note 12) | 368,210 | 321,689 | 281,688 | |||||||||||||
Other operating expenses (note 20) | 426,530 | 305,560 | 243,042 | |||||||||||||
Non-interest expense before reimbursable items | 1,631,111 | 1,358,828 | 1,196,978 | |||||||||||||
Reimbursable items | 312,280 | 229,538 | 225,165 | |||||||||||||
Total non-interest expense | 1,943,391 | 1,588,366 | 1,422,143 | |||||||||||||
Minority interest in subsidiaries’ net income | 37,381 | 28,724 | 26,972 | |||||||||||||
Income before income taxes | 824,022 | 689,281 | 611,501 | |||||||||||||
Income tax expense (note 17) | 307,576 | 252,248 | 222,576 | |||||||||||||
Net income | $ | 516,446 | 437,033 | 388,925 | ||||||||||||
Net income per share (notes 1 and 11): | ||||||||||||||||
Basic | $ | 1.66 | 1.42 | 1.29 | ||||||||||||
Diluted | 1.64 | 1.41 | 1.28 | |||||||||||||
Weighted average shares outstanding (note 11): | ||||||||||||||||
Basic | 311,495 | 307,262 | 302,010 | |||||||||||||
Diluted | 314,815 | 310,330 | 304,928 | |||||||||||||
F-3
Table of Contents
(In thousands, except per share data) | |||||||||||||||||||||||||||||||||
Accumulated | |||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||
Shares | Common | Treasury | Unearned | Comprehensive | Retained | ||||||||||||||||||||||||||||
Years ended December 31, 2005, 2004, and 2003 | Issued | Stock | Surplus | Stock | Compensation | Income (Loss) | Earnings | Total | |||||||||||||||||||||||||
Balance at December 31, 2002 | 300,573 | $ | 300,573 | 305,718 | (1,285 | ) | (146 | ) | 46,113 | 1,389,880 | 2,040,853 | ||||||||||||||||||||||
Net income | — | — | — | — | — | — | 388,925 | 388,925 | |||||||||||||||||||||||||
Other comprehensive loss, net of tax (note 10): | |||||||||||||||||||||||||||||||||
Net unrealized loss on cash flow hedges | — | — | — | — | — | (2,773 | ) | — | (2,773 | ) | |||||||||||||||||||||||
Change in unrealized gains/losses on investment securities available for sale, net of reclassification adjustment | — | — | — | — | — | (19,724 | ) | — | (19,724 | ) | |||||||||||||||||||||||
Gain on foreign currency translation | — | — | — | — | — | 5,893 | — | 5,893 | |||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (16,604 | ) | — | (16,604 | ) | |||||||||||||||||||||||
Comprehensive income | — | — | — | — | — | — | — | 372,321 | |||||||||||||||||||||||||
Issuance of common stock for acquisitions (note 2) | 4,641 | 4,641 | 95,835 | — | — | — | — | 100,476 | |||||||||||||||||||||||||
Cash dividends declared - $.66 per share | — | — | — | — | — | — | (199,748 | ) | (199,748 | ) | |||||||||||||||||||||||
Amortization of unearned compensation (note 15) | — | — | — | — | 105 | — | — | 105 | |||||||||||||||||||||||||
Stock options exercised (note 15) | 2,534 | 2,534 | 25,536 | — | — | — | — | 28,070 | |||||||||||||||||||||||||
Stock option tax benefit | — | — | 12,348 | — | — | — | — | 12,348 | |||||||||||||||||||||||||
Ownership change at majority-owned subsidiary | — | — | 3,494 | — | — | — | — | 3,494 | |||||||||||||||||||||||||
Treasury stock purchases | — | — | — | (112,655 | ) | — | — | — | (112,655 | ) | |||||||||||||||||||||||
Issuance of stock options in connection with acquisition | — | — | — | — | (225 | ) | — | — | (225 | ) | |||||||||||||||||||||||
Balance at December 31, 2003 | 307,748 | $ | 307,748 | 442,931 | (113,940 | ) | (266 | ) | 29,509 | 1,579,057 | 2,245,039 | ||||||||||||||||||||||
Net income | — | — | — | — | — | — | 437,033 | 437,033 | |||||||||||||||||||||||||
Other comprehensive loss, net of tax (note 10): | |||||||||||||||||||||||||||||||||
Net unrealized loss on cash flow hedges | — | — | — | — | — | (5,753 | ) | — | (5,753 | ) | |||||||||||||||||||||||
Change in unrealized gains/losses on investment securities available for sale, net of reclassification adjustment | — | — | — | — | — | (20,577 | ) | — | (20,577 | ) | |||||||||||||||||||||||
Gain on foreign currency translation | — | — | — | — | — | 5,724 | — | 5,724 | |||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (20,606 | ) | — | (20,606 | ) | |||||||||||||||||||||||
Comprehensive income | — | — | — | — | — | — | — | 416,427 | |||||||||||||||||||||||||
Issuance of common stock for acquisitions (note 2) | 5,478 | 5,478 | 151,700 | — | — | — | — | 157,178 | |||||||||||||||||||||||||
Cash dividends declared - $.69 per share | — | — | — | — | — | — | (213,686 | ) | (213,686 | ) | |||||||||||||||||||||||
Amortization of unearned compensation (note 15) | — | — | — | — | 160 | — | — | 160 | |||||||||||||||||||||||||
Stock options exercised (note 15) | 2,405 | 2,405 | 21,060 | — | — | — | — | 23,465 | |||||||||||||||||||||||||
Stock option tax benefit | — | — | 12,705 | — | — | — | — | 12,705 | |||||||||||||||||||||||||
Ownership change at majority-owned subsidiary | — | — | 5 | — | — | — | — | 5 | |||||||||||||||||||||||||
Treasury stock purchase | — | — | — | (4 | ) | — | — | — | (4 | ) | |||||||||||||||||||||||
Issuance of common stock under commitment to charitable foundation | 5 | 5 | (5 | ) | — | — | — | — | — | ||||||||||||||||||||||||
Balance at December 31, 2004 | 315,636 | $ | 315,636 | 628,396 | (113,944 | ) | (106 | ) | 8,903 | 1,802,404 | 2,641,289 | ||||||||||||||||||||||
Net income | — | — | — | — | — | — | 516,446 | 516,446 | |||||||||||||||||||||||||
Other comprehensive loss, net of tax (note 10): | |||||||||||||||||||||||||||||||||
Net unrealized loss on cash flow hedges | — | — | — | — | — | (2,240 | ) | — | (2,240 | ) | |||||||||||||||||||||||
Change in unrealized gains/losses on investment securities available for sale, net of reclassification adjustment | — | — | — | — | — | (28,354 | ) | — | (28,354 | ) | |||||||||||||||||||||||
Loss on foreign currency translation | — | — | — | — | — | (7,845 | ) | — | (7,845 | ) | |||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (38,439 | ) | — | (38,439 | ) | |||||||||||||||||||||||
Comprehensive income | — | — | — | — | — | — | — | 478,007 | |||||||||||||||||||||||||
Cash dividends declared - $.73 per share | — | — | — | — | — | — | (227,663 | ) | (227,663 | ) | |||||||||||||||||||||||
Issuance of restricted stock (note 15) | 146 | 146 | 3,807 | — | (3,953 | ) | — | — | — | ||||||||||||||||||||||||
Amortization of unearned compensation (note 15) | — | — | — | — | 933 | — | — | 933 | |||||||||||||||||||||||||
Stock options exercised (note 15) | 2,506 | 2,506 | 40,619 | — | — | — | — | 43,125 | |||||||||||||||||||||||||
Stock option tax benefit | — | — | 9,505 | — | — | — | — | 9,505 | |||||||||||||||||||||||||
Ownership change at majority-owned subsidiary | — | — | 3,907 | — | — | — | — | 3,907 | |||||||||||||||||||||||||
Issuance of common stock for acquisitions (note 2) | 8 | 8 | 218 | — | — | — | — | 226 | |||||||||||||||||||||||||
Issuance of common stock under commitment to charitable foundation | 5 | 5 | (5 | ) | — | — | — | — | — | ||||||||||||||||||||||||
Balance at December 31, 2005 | 318,301 | $ | 318,301 | 686,447 | (113,944 | ) | (3,126 | ) | (29,536 | ) | 2,091,187 | 2,949,329 | |||||||||||||||||||||
F-4
Table of Contents
(In thousands) | |||||||||||||||
Years Ended December 31, | |||||||||||||||
2005 | 2004 | 2003 | |||||||||||||
Operating Activities | |||||||||||||||
Net income | $ | 516,446 | 437,033 | 388,925 | |||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Provision for losses on loans | 82,532 | 75,319 | 71,777 | ||||||||||||
Depreciation, amortization, and accretion, net | 193,131 | 161,062 | 112,012 | ||||||||||||
Equity in income of joint ventures | (6,135 | ) | (23,736 | ) | (17,810 | ) | |||||||||
Deferred income tax (benefit) expense | (53,575 | ) | 22,401 | 26,779 | |||||||||||
(Increase) decrease in interest receivable | (40,853 | ) | (16,495 | ) | 1,466 | ||||||||||
Increase (decrease) in interest payable | 23,363 | 3,007 | (4,783 | ) | |||||||||||
Minority interest in subsidiaries’ net income | 37,381 | 28,724 | 26,972 | ||||||||||||
Increase in trading account assets | (27,322 | ) | — | — | |||||||||||
(Increase) decrease in mortgage loans held for sale | (22,958 | ) | 13,291 | 112,552 | |||||||||||
Increase in prepaid and other assets | (80,982 | ) | (36,700 | ) | (11,606 | ) | |||||||||
Increase (decrease) in accrued salaries and benefits | 37,953 | 36,000 | (10,813 | ) | |||||||||||
(Decrease) increase in other liabilities | (26,422 | ) | 166,375 | (31,280 | ) | ||||||||||
(Decrease) increase in billings in excess of costs and profits on uncompleted contracts | — | (17,573 | ) | 17,573 | |||||||||||
Gain on sale of banking locations | — | (15,849 | ) | — | |||||||||||
Impairment of developed software | 3,619 | 10,059 | — | ||||||||||||
Other, net | (16,462 | ) | (46,640 | ) | 40,422 | ||||||||||
Net cash provided by operating activities | 619,716 | 796,278 | 722,186 | ||||||||||||
Investing Activities | |||||||||||||||
Net cash paid for acquisitions | (56,995 | ) | (37,172 | ) | (66,204 | ) | |||||||||
Net decrease in interest earning deposits with banks | 1,173 | 70 | 632 | ||||||||||||
Net decrease (increase) in federal funds sold and securities purchased under resale agreements | 66,549 | 34,456 | (47,978 | ) | |||||||||||
Proceeds from maturities and principal collections of investment securities available for sale | 660,085 | 1,351,436 | 1,429,904 | ||||||||||||
Proceeds from sales of investment securities available for sale | 50,048 | 33,332 | 207,124 | ||||||||||||
Purchases of investment securities available for sale | (1,019,585 | ) | (1,491,355 | ) | (1,900,237 | ) | |||||||||
Net cash received on sale of banking locations | — | 25,069 | — | ||||||||||||
Net increase in loans | (1,990,774 | ) | (2,598,559 | ) | (1,426,471 | ) | |||||||||
Purchases of premises and equipment | (106,674 | ) | (111,396 | ) | (184,226 | ) | |||||||||
Proceeds from disposals of premises and equipment | 1,708 | 3,061 | 2,681 | ||||||||||||
Contract acquisition costs | (19,468 | ) | (29,150 | ) | (18,129 | ) | |||||||||
Additions to licensed computer software from vendors | (12,875 | ) | (57,302 | ) | (47,312 | ) | |||||||||
Additions to internally developed computer software | (22,602 | ) | (5,224 | ) | (17,689 | ) | |||||||||
Net cash used in investing activities | (2,449,410 | ) | (2,882,734 | ) | (2,067,905 | ) | |||||||||
Financing Activities | |||||||||||||||
Net increase in demand and savings deposits | 1,354,258 | 1,388,914 | 1,290,526 | ||||||||||||
Net increase in certificates of deposit | 852,639 | 803,208 | 32,029 | ||||||||||||
Net (decrease) increase in federal funds purchased and securities sold under repurchase agreements | (49,411 | ) | (192,229 | ) | 79,803 | ||||||||||
Principal repayments on long-term debt | (617,177 | ) | (399,690 | ) | (337,160 | ) | |||||||||
Proceeds from issuance of long-term debt | 672,666 | 655,727 | 511,362 | ||||||||||||
Treasury stock purchased | — | (4 | ) | (112,655 | ) | ||||||||||
Dividends paid to shareholders | (224,303 | ) | (209,883 | ) | (194,177 | ) | |||||||||
Proceeds from issuance of common stock | 43,125 | 23,465 | 28,070 | ||||||||||||
Net cash provided by financing activities | 2,031,797 | 2,069,508 | 1,297,798 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalent balances held in foreign currencies | (4,252 | ) | 3,953 | 2,859 | |||||||||||
Increase (decrease) in cash and cash equivalents | 197,851 | (12,995 | ) | (45,062 | ) | ||||||||||
Cash and due from banks at beginning of year | 683,035 | 696,030 | 741,092 | ||||||||||||
Cash and due from banks at end of year | $ | 880,886 | 683,035 | 696,030 | |||||||||||
F-5
Table of Contents
Note 1 | Summary of Significant Accounting Policies |
F-6
Table of Contents
F-7
Table of Contents
F-8
Table of Contents
F-9
Table of Contents
F-10
Table of Contents
F-11
Table of Contents
F-12
Table of Contents
(In thousands, except | Years Ended December 31, | ||||||||||||
per share data) | |||||||||||||
2005 | 2004 | 2003 | |||||||||||
Net income as reported | $ | 516,446 | 437,033 | 388,925 | |||||||||
Total stock-based employee compensation expense determined under fair value based methods for all awards, net of related tax effects | (14,050 | ) | (13,344 | ) | (13,856 | ) | |||||||
Pro forma | $ | 502,396 | 423,689 | 375,069 | |||||||||
Earnings per share: | |||||||||||||
Basic-as reported | $ | 1.66 | 1.42 | 1.29 | |||||||||
Basic-pro forma | 1.61 | 1.38 | 1.24 | ||||||||||
Diluted-as reported | 1.64 | 1.41 | 1.28 | ||||||||||
Diluted-pro forma | 1.60 | 1.36 | 1.23 | ||||||||||
F-13
Table of Contents
F-14
Table of Contents
Vital Processing Services, L.L.C. | ||||||
(In thousands) | ||||||
Cash and cash equivalents | $ | 19,399 | ||||
Contract acquisition costs and computer software, net | 31,373 | |||||
Intangible assets | 12,000 | |||||
Goodwill | 36,686 | |||||
Other assets | 29,221 | |||||
Total assets acquired | 128,679 | |||||
Total liabilities assumed | 32,836 | |||||
Minority interest | 49 | |||||
Net assets acquired | $ | 95,794 | ||||
F-15
Table of Contents
(In thousands) | |||||
U.S. Treasury and U.S. Government agency securities | $ | 117 | |||
Mortgage-backed securities | 25,403 | ||||
State and municipal securities | 1,401 | ||||
Other investments | 401 | ||||
Total | $ | 27,322 | |||
F-16
Table of Contents
Note 4 | Investment Securities Available for Sale |
December 31, 2005 | ||||||||||||||||
Gross | Gross | Estimated | ||||||||||||||
(In thousands) | Amortized | Unrealized | Unrealized | Fair | ||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
U.S. Treasury and U.S. Government agency securities | $ | 1,651,240 | 806 | (27,434 | ) | 1,624,612 | ||||||||||
Mortgage-backed securities | 1,032,485 | 1,379 | (27,136 | ) | 1,006,728 | |||||||||||
State and municipal securities | 206,744 | 6,151 | (524 | ) | 212,371 | |||||||||||
Equity securities | 112,350 | 493 | (37 | ) | 112,806 | |||||||||||
Other investments | 1,827 | — | (24 | ) | 1,803 | |||||||||||
Total | $ | 3,004,646 | 8,829 | (55,155 | ) | 2,958,320 | ||||||||||
December 31, 2004 | ||||||||||||||||
Gross | Gross | Estimated | ||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
U.S. Treasury and U.S. Government agency securities | $ | 1,312,599 | 2,911 | (10,039 | ) | 1,305,471 | ||||||||||
Mortgage-backed securities | 1,031,599 | 5,249 | (10,124 | ) | 1,026,724 | |||||||||||
State and municipal securities | 226,982 | 11,170 | (320 | ) | 237,832 | |||||||||||
Equity securities | 119,823 | 1,014 | — | 120,837 | ||||||||||||
Other investments | 4,814 | 28 | (113 | ) | 4,729 | |||||||||||
Total | $ | 2,695,817 | 20,372 | (20,596 | ) | 2,695,593 | ||||||||||
December 31, 2005 | ||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
(In thousands) | Value | Losses | Value | Losses | Value | Losses | ||||||||||||||||||
U.S. Treasury and U.S. Government agency securities | $ | 576,406 | (8,198 | ) | 875,243 | (19,236 | ) | 1,451,649 | (27,434 | ) | ||||||||||||||
Mortgage-backed securities | 386,242 | (6,557 | ) | 509,521 | (20,579 | ) | 895,763 | (27,136 | ) | |||||||||||||||
State and municipal securities | 24,506 | (253 | ) | 5,157 | (271 | ) | 29,663 | (524 | ) | |||||||||||||||
Equity securities | 249 | (37 | ) | — | — | 249 | (37 | ) | ||||||||||||||||
Other investments | 1,264 | (24 | ) | — | — | 1,264 | (24 | ) | ||||||||||||||||
Total | $ | 988,667 | (15,069 | ) | 1,389,921 | (40,086 | ) | 2,378,588 | (55,155 | ) | ||||||||||||||
F-17
Table of Contents
December 31, 2004 | ||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
(In thousands) | Value | Losses | Value | Losses | Value | Losses | ||||||||||||||||||
U.S. Treasury and U.S. Government agency securities | $ | 948,246 | (9,062 | ) | 36,023 | (977 | ) | 984,269 | (10,039 | ) | ||||||||||||||
Mortgage-backed securities | 579,017 | (7,870 | ) | 92,068 | (2,254 | ) | 671,085 | (10,124 | ) | |||||||||||||||
State and municipal securities | 15,524 | (316 | ) | 690 | (4 | ) | 16,214 | (320 | ) | |||||||||||||||
Equity securities | — | — | — | — | — | — | ||||||||||||||||||
Other investments | 1,557 | (12 | ) | 507 | (101 | ) | 2,064 | (113 | ) | |||||||||||||||
Total | $ | 1,544,344 | (17,260 | ) | 129,288 | (3,336 | ) | 1,673,632 | (20,596 | ) | ||||||||||||||
F-18
Table of Contents
(In thousands) | Amortized | Estimated | |||||||
Cost | Fair Value | ||||||||
U.S. Treasury and U.S. Government agency securities: | |||||||||
Within 1 year | $ | 298,657 | 295,922 | ||||||
1 to 5 years | 1,185,184 | 1,164,529 | |||||||
5 to 10 years | 142,726 | 139,969 | |||||||
More than 10 years | 24,673 | 24,192 | |||||||
$ | 1,651,240 | 1,624,612 | |||||||
State and municipal securities: | |||||||||
Within 1 year | $ | 19,632 | 19,722 | ||||||
1 to 5 years | 81,886 | 83,639 | |||||||
5 to 10 years | 76,093 | 79,172 | |||||||
More than 10 years | 29,133 | 29,838 | |||||||
$ | 206,744 | 212,371 | |||||||
Other investments: | |||||||||
Within 1 year | $ | 271 | 264 | ||||||
1 to 5 years | 1,367 | 1,350 | |||||||
5 to 10 years | — | — | |||||||
More than 10 years | 189 | 189 | |||||||
$ | 1,827 | 1,803 | |||||||
Equity securities | $ | 112,350 | 112,806 | ||||||
Mortgage-backed securities | $ | 1,032,485 | 1,006,728 | ||||||
Total investment securities: | |||||||||
Within 1 year | $ | 318,560 | 315,908 | ||||||
1 to 5 years | 1,268,437 | 1,249,518 | |||||||
5 to 10 years | 218,819 | 219,141 | |||||||
More than 10 years | 53,995 | 54,219 | |||||||
Equity securities | 112,350 | 112,806 | |||||||
Mortgage-backed securities | 1,032,485 | 1,006,728 | |||||||
$ | 3,004,646 | 2,958,320 | |||||||
Gross | Gross | |||||||||||
Proceeds | Realized Gains | Realized Losses | ||||||||||
(In thousands) | ||||||||||||
2005 | $ | 50,048 | 744 | (281 | ) | |||||||
2004 | $ | 33,332 | 620 | (545 | ) | |||||||
2003 | $ | 207,124 | 2,960 | (469 | ) | |||||||
Note 5 | Loans |
December 31, | ||||||||||
(In thousands) | ||||||||||
2005 | 2004 | |||||||||
Commercial: | ||||||||||
Commercial, financial, and agricultural | $ | 5,231,150 | 5,064,828 | |||||||
Real estate-construction | 6,394,161 | 5,173,275 | ||||||||
Real estate-mortgage | 6,465,915 | 6,116,308 | ||||||||
Total commercial | 18,091,226 | 16,354,411 | ||||||||
Retail: | ||||||||||
Real estate-mortgage | 2,559,339 | 2,298,682 | ||||||||
Consumer loans-credit card | 268,348 | 256,297 | ||||||||
Consumer loans-other | 521,521 | 612,957 | ||||||||
Total retail | 3,349,208 | 3,167,936 | ||||||||
Total loans | 21,440,434 | 19,522,347 | ||||||||
Unearned income | (48,087 | ) | (41,951 | ) | ||||||
Total loans, net of unearned income | $ | 21,392,347 | 19,480,396 | |||||||
Years Ended December 31, | ||||||||||||
(In thousands) | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Balance at beginning of year | $ | 265,745 | 226,059 | 199,841 | ||||||||
Allowance for loan losses of acquired/ divested subsidiaries | — | 5,615 | 10,534 | |||||||||
Provision for losses on loans | 82,532 | 75,319 | 71,777 | |||||||||
Recoveries of loans previously charged off | 8,561 | 9,720 | 8,112 | |||||||||
Loans charged off | (67,226 | ) | (50,968 | ) | (64,205 | ) | ||||||
Balance at end of year | $ | 289,612 | 265,745 | 226,059 | ||||||||
F-19
Table of Contents
(In thousands) | ||||
Balance at December 31, 2004 | $ | 256,711 | ||
Adjustment for executive officer and director changes | 1,876 | |||
Adjusted balance at December 31, 2004 | 258,587 | |||
New loans | 192,822 | |||
Repayments | (158,698 | ) | ||
Balance at December 31, 2005 | $ | 292,711 | ||
(In thousands) | Contract | |||
Acquisition | ||||
Costs | ||||
2006 | $ | 41,688 | ||
2007 | 28,254 | |||
2008 | 24,669 | |||
2009 | 23,095 | |||
2010 | 15,429 | |||
Weighted | ||||
Average | ||||
Amortization | ||||
Period (Yrs) | ||||
Payments for processing rights | 11.6 | |||
Conversion costs | 6.9 | |||
Combined | 8.1 | |||
F-20
Table of Contents
(In thousands) | ||||||||
2005 | 2004 | |||||||
Licensed computer software | $ | 395,992 | 383,371 | |||||
Software development costs | 158,384 | 126,000 | ||||||
Acquisition technology intangibles | 30,700 | 12,200 | ||||||
585,076 | 521,571 | |||||||
Less accumulated amortization | (317,088 | ) | (252,924 | ) | ||||
Computer software, net | $ | 267,988 | 268,647 | |||||
Computer | ||||
(In thousands) | Software | |||
2006 | $ | 59,641 | ||
2007 | 55,480 | |||
2008 | 48,999 | |||
2009 | 39,331 | |||
2010 | 15,032 | |||
Weighted | ||||
Average | ||||
Amortization | ||||
Period (Yrs) | ||||
Licensed computer software | 7.0 | |||
Software development costs | 6.7 | |||
Acquisition technology intangibles | 7.4 | |||
Combined | 7.0 | |||
F-21
Table of Contents
Note 7 | Other Intangible Assets and Other Assets |
2005 | 2004 | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Gross | Gross | ||||||||||||||||||||||||
Carrying | Accumulated | Carrying | Accumulated | ||||||||||||||||||||||
Amount | Amortization | Net | Amount | Amortization | Net | ||||||||||||||||||||
Other intangible assets: | |||||||||||||||||||||||||
Purchased trust revenues | $ | 4,210 | (1,286 | ) | 2,924 | $ | 4,210 | (1,006 | ) | 3,204 | |||||||||||||||
Acquired customer contracts | 7,731 | (3,818 | ) | 3,913 | 7,731 | (2,536 | ) | 5,195 | |||||||||||||||||
Employment contracts/non-competition agreements | 1,091 | (631 | ) | 460 | 1,091 | (308 | ) | 783 | |||||||||||||||||
Core deposit premiums | 39,674 | (16,124 | ) | 23,550 | 50,031 | (21,915 | ) | 28,116 | |||||||||||||||||
Intangibles associated with the acquisition of minority interest in TSYS | 2,846 | (759 | ) | 2,087 | 2,846 | (474 | ) | 2,372 | |||||||||||||||||
Customer relationships | 13,800 | (2,100 | ) | 11,700 | 1,800 | (250 | ) | 1,550 | |||||||||||||||||
Other | 700 | (467 | ) | 233 | 700 | (292 | ) | 408 | |||||||||||||||||
Total carrying value | $ | 70,052 | (25,185 | ) | 44,867 | $ | 68,409 | (26,781 | ) | 41,628 | |||||||||||||||
Note 8 | Interest Bearing Deposits |
2005 | 2004 | ||||||||
(In thousands) | |||||||||
Interest bearing demand deposits | $ | 3,133,607 | $ | 2,998,947 | |||||
Money market accounts | 5,748,378 | 4,869,200 | |||||||
Savings accounts | 524,652 | 547,074 | |||||||
Time deposits under $100,000 | 2,440,484 | 2,180,245 | |||||||
Time deposits of $100,000 or more | 2,951,724 | 2,353,057 | |||||||
14,798,845 | 12,948,523 | ||||||||
Brokered time deposits* | 2,284,770 | 2,291,037 | |||||||
Total interest bearing deposits | $ | 17,083,615 | $ | 15,239,560 | |||||
* Brokered time deposits are in amounts of $100,000 or more. | |||||||||
F-22
Table of Contents
(In thousands) | |||||
Maturing within one year | $ | 5,425,428 | |||
between 1 — 2 years | 1,159,941 | ||||
2 — 3 years | 456,059 | ||||
3 — 4 years | 207,732 | ||||
4 — 5 years | 237,285 | ||||
thereafter | 190,533 | ||||
$ | 7,676,978 | ||||
Note 9 | Long-Term Debt and Short-Term Borrowings |
2005 | 2004 | ||||||||
(In thousands) | |||||||||
Parent Company: | |||||||||
7.25% senior notes, due December 15, 2005, with semi-annual interest payments and principal to be paid at maturity | $ | — | 200,000 | ||||||
4.875% subordinated notes, due February 15, 2013, with semi-annual interest payments and principal to be paid at maturity | 300,000 | 300,000 | |||||||
5.125% subordinated notes, due June 15, 2017, with semi-annual interest payments and principal to be paid at maturity | 450,000 | — | |||||||
LIBOR + 3.60% debentures, due December 23, 2031 with quarterly interest payments and principal to be paid at maturity (rate of 8.1% at December 31, 2005) | 10,252 | 10,297 | |||||||
Hedge-related basis adjustment | (883 | ) | 2,906 | ||||||
Total long-term debt — Parent Company | 759,369 | 513,203 | |||||||
Subsidiaries: | |||||||||
Federal Home Loan Bank advances with interest and principal payments due at various maturity dates through 2018 and interest rates ranging from 2.00% to 6.68% at December 31, 2005 (weighted average interest rate is 4.14% at December 31, 2005) | 1,163,570 | 1,356,205 | |||||||
Other notes payable, capital leases and software obligations payable with interest and principal payments due at various maturity dates through 2008 and interest rates ranging from 2.6% to 18.0% at December 31, 2005 | 10,699 | 10,175 | |||||||
Total long-term debt — subsidiaries | 1,174,269 | 1,366,380 | |||||||
Total long-term debt | $ | 1,933,638 | 1,879,583 | ||||||
F-23
Table of Contents
Parent | ||||||||||||
Company | Subsidiaries | Total | ||||||||||
(In thousands) | ||||||||||||
2006 | $ | — | 681,797 | 681,797 | ||||||||
2007 | — | 238,321 | 238,321 | |||||||||
2008 | — | 17,592 | 17,592 | |||||||||
2009 | — | 58,952 | 58,952 | |||||||||
2010 | — | 16,615 | 16,615 | |||||||||
2005 | 2004 | 2003 | ||||||||||
(In thousands) | ||||||||||||
Balance at December 31 | $ | 1,158,669 | 1,208,080 | 1,354,887 | ||||||||
Weighted average interest rate at December 31 | 3.69 | % | 1.95 | % | 0.93 | % | ||||||
Maximum month end balance during the year | $ | 1,918,797 | 1,749,923 | 1,459,818 | ||||||||
Average amount outstanding during the year | $ | 1,103,005 | 1,479,815 | 1,101,216 | ||||||||
Weighted average interest rate during the year | 2.86 | % | 1.30 | % | 1.07 | % | ||||||
Note 10 | Other Comprehensive Income (Loss) |
2005 | 2004 | 2003 | ||||||||||||||||||||||||||||||||||
(In thousands) | Before- | Tax | Net of | Before- | Tax | Net of | Before- | Tax | Net of | |||||||||||||||||||||||||||
Tax | (Expense) | Tax | Tax | (Expense) | Tax | Tax | (Expense) | Tax | ||||||||||||||||||||||||||||
Amount | or Benefit | Amount | Amount | or Benefit | Amount | Amount | or Benefit | Amount | ||||||||||||||||||||||||||||
Net unrealized gains (losses) on cash flow hedges | $ | (3,670 | ) | 1,430 | (2,240 | ) | (9,718 | ) | 3,965 | (5,753 | ) | (4,562 | ) | 1,789 | (2,773 | ) | ||||||||||||||||||||
Net unrealized gains (losses) on investment securities available for sale: | ||||||||||||||||||||||||||||||||||||
Unrealized gains (losses) arising during the year | (45,639 | ) | 17,568 | (28,071 | ) | (32,988 | ) | 12,457 | (20,531 | ) | (29,505 | ) | 11,313 | (18,192 | ) | |||||||||||||||||||||
Reclassification adjustment for (gains) losses realized in net income | (463 | ) | 180 | (283 | ) | (75 | ) | 29 | (46 | ) | (2,491 | ) | 959 | (1,532 | ) | |||||||||||||||||||||
Net unrealized gains (losses) | (46,102 | ) | 17,748 | (28,354 | ) | (33,063 | ) | 12,486 | (20,577 | ) | (31,996 | ) | 12,272 | (19,724 | ) | |||||||||||||||||||||
Foreign currency translation gains (losses) | (12,161 | ) | 4,316 | (7,845 | ) | 8,893 | (3,169 | ) | 5,724 | �� | 9,379 | (3,486 | ) | 5,893 | ||||||||||||||||||||||
Other comprehensive loss | $ | (61,933 | ) | 23,494 | (38,439 | ) | (33,888 | ) | 13,282 | (20,606 | ) | (27,179 | ) | 10,575 | (16,604 | ) | ||||||||||||||||||||
F-24
Table of Contents
Note 11 | Earnings Per Share |
2005 | 2004 | 2003 | ||||||||||||||||||||||||||||||||||
(In thousands, | Weighted | Weighted | Weighted | |||||||||||||||||||||||||||||||||
except per share data) | Net | Average | Net Income | Net | Average | Net Income | Net | Average | Net Income | |||||||||||||||||||||||||||
Income | Shares | Per Share | Income | Shares | Per Share | Income | Shares | Per Share | ||||||||||||||||||||||||||||
Basic EPS | $ | 516,446 | 311,495 | $ | 1.66 | $ | 437,033 | 307,262 | $ | 1.42 | $ | 388,925 | 302,010 | $ | 1.29 | |||||||||||||||||||||
Effect of dilutive options | (158 | )* | 3,320 | (247 | )* | 3,068 | — | 2,918 | ||||||||||||||||||||||||||||
Diluted EPS | $ | 516,288 | 314,815 | $ | 1.64 | $ | 436,786 | 310,330 | $ | 1.41 | $ | 388,925 | 304,928 | $ | 1.28 | |||||||||||||||||||||
* Represents dilution from outstanding TSYS stock options which enable their holders to obtain TSYS common stock. | ||||||||||||||||||||||||||||||||||||
Weighted Average | ||||||||
Quarter | Number | Exercise Price | ||||||
Ended | of Shares | Per Share | ||||||
December 31, 2005 | 4,725,260 | $ | 29.21 | |||||
September 30, 2005 | 4,703,210 | $ | 29.22 | |||||
June 30, 2005 | 2,933,225 | $ | 29.05 | |||||
March 31, 2005 | 2,637,150 | $ | 28.98 | |||||
December 31, 2004 | 2,637,150 | $ | 28.98 | |||||
September 30, 2004 | 7,002,758 | $ | 27.34 | |||||
June 30, 2004 | 7,046,977 | $ | 27.33 | |||||
March 31, 2004 | 6,905,462 | $ | 27.37 | |||||
December 31, 2003 | 2,609,500 | $ | 28.99 | |||||
September 30, 2003 | 6,475,443 | $ | 27.13 | |||||
June 30, 2003 | 11,401,281 | $ | 25.05 | |||||
March 31, 2003 | 11,577,418 | $ | 25.02 | |||||
Note 12 | Derivative Instruments, Commitments and Contingencies |
F-25
Table of Contents
Weighted | Weighted | Net | ||||||||||||||||||||||||||
Average | Weighted | Average | Unrealized | |||||||||||||||||||||||||
Notional | Receive | Average Pay | Maturity | Unrealized | Unrealized | Gains | ||||||||||||||||||||||
Amount | Rate | Rate* | In Months | Gains | Losses | (Losses) | ||||||||||||||||||||||
December 31, 2005 | ||||||||||||||||||||||||||||
Receive fixed swaps: | ||||||||||||||||||||||||||||
Fair value hedges | $ | 807,500 | 4.38 | % | 4.28 | % | 70 | $ | 1,270 | (14,804 | ) | (13,534 | ) | |||||||||||||||
Cash flow hedges | 350,000 | 6.10 | % | 7.25 | % | 18 | 117 | (3,667 | ) | (3,550 | ) | |||||||||||||||||
Total | $ | 1,157,500 | 4.90 | % | 5.18 | % | 54 | 1,387 | (18,471 | ) | (17,084 | ) | ||||||||||||||||
December 31, 2004 | ||||||||||||||||||||||||||||
Receive fixed swaps: | ||||||||||||||||||||||||||||
Fair value hedges | $ | 477,500 | 4.24 | % | 2.33 | % | 88 | $ | 3,435 | (5,214 | ) | (1,779 | ) | |||||||||||||||
Cash flow hedges | 500,000 | 5.12 | % | 5.25 | % | 12 | — | (4,090 | ) | (4,090 | ) | |||||||||||||||||
Sub Total | 977,500 | 4.69 | % | 3.83 | % | 49 | 3,435 | (9,304 | ) | (5,869 | ) | |||||||||||||||||
Forward starting swaps: | ||||||||||||||||||||||||||||
Cash flow hedges | 200,000 | — | — | 123 | 293 | (2,109 | ) | (1,816 | ) | |||||||||||||||||||
Total | $ | 1,177,500 | $ | 3,728 | (11,413 | ) | (7,685 | ) | ||||||||||||||||||||
* | Variable pay rate based upon contract rates in effect at December 31, 2005 and 2004. |
F-26
Table of Contents
(In thousands) | |||||
Standby and commercial letters of credit | $ | 2,312,148 | |||
Commitments to fund commercial real estate, construction, and land development loans | 2,054,375 | ||||
Unused credit card lines | 1,386,723 | ||||
Other loan commitments | 3,970,128 | ||||
Total | $ | 9,723,374 | |||
(In thousands) | |||||
2006 | $ | 130,967 | |||
2007 | 108,865 | ||||
2008 | 58,709 | ||||
2009 | 24,349 | ||||
2010 | 14,167 | ||||
Thereafter | 46,846 | ||||
Total | $ | 383,903 | |||
F-27
Table of Contents
F-28
Table of Contents
To be Well | ||||||||||||||||||||||||
Capitalized Under | ||||||||||||||||||||||||
For Capital Adequacy | Prompt Corrective | |||||||||||||||||||||||
Actual | Purposes | Action Provisions | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | |||||||||||||||||||
Synovus Financial Corp. | ||||||||||||||||||||||||
Tier I capital | $ | 2,660,704 | 2,369,332 | 1,040,352 | 943,991 | n/a | n/a | |||||||||||||||||
Total risk-based capital | 3,700,315 | 2,935,077 | 2,080,704 | 1,887,982 | n/a | n/a | ||||||||||||||||||
Tier I capital ratio | 10.23 | % | 10.04 | 4.00 | 4.00 | n/a | n/a | |||||||||||||||||
Total risk-based capital ratio | 14.23 | 12.44 | 8.00 | 8.00 | n/a | n/a | ||||||||||||||||||
Leverage ratio | 9.99 | 9.78 | 4.00 | 4.00 | n/a | n/a | ||||||||||||||||||
Columbus Bank and Trust Company | ||||||||||||||||||||||||
Tier I capital | $ | 1,145,365 | 1,014,308 | 211,243 | 196,739 | 316,865 | 295,108 | |||||||||||||||||
Total risk-based capital | 1,177,604 | 1,047,399 | 422,487 | 393,477 | 528,108 | 491,847 | ||||||||||||||||||
Tier I capital ratio | 21.69 | % | 20.62 | 4.00 | 4.00 | 6.00 | 6.00 | |||||||||||||||||
Total risk-based capital ratio | 22.30 | 21.30 | 8.00 | 8.00 | 10.00 | 10.00 | ||||||||||||||||||
Leverage ratio | 23.15 | 20.70 | 4.00 | 4.00 | 5.00 | 5.00 | ||||||||||||||||||
The National Bank of South Carolina | ||||||||||||||||||||||||
Tier I capital | $ | 305,544 | 276,365 | 128,994 | 116,854 | 193,491 | 175,281 | |||||||||||||||||
Total risk-based capital | 340,828 | 310,383 | 257,988 | 233,708 | 322,485 | 292,135 | ||||||||||||||||||
Tier I capital ratio | 9.47 | % | 9.46 | 4.00 | 4.00 | 6.00 | 6.00 | |||||||||||||||||
Total risk-based capital ratio | 10.57 | 10.62 | 8.00 | 8.00 | 10.00 | 10.00 | ||||||||||||||||||
Leverage ratio | 8.35 | 8.70 | 4.00 | 4.00 | 5.00 | 5.00 | ||||||||||||||||||
Bank of North Georgia | ||||||||||||||||||||||||
Tier I capital | $ | 283,613 | 243,906 | 120,228 | 107,778 | 180,343 | 161,667 | |||||||||||||||||
Total risk-based capital | 316,432 | 274,580 | 240,457 | 215,556 | 300,571 | 269,445 | ||||||||||||||||||
Tier I capital ratio | 9.44 | % | 9.05 | 4.00 | 4.00 | 6.00 | 6.00 | |||||||||||||||||
Total risk-based capital ratio | 10.53 | 10.19 | 8.00 | 8.00 | 10.00 | 10.00 | ||||||||||||||||||
Leverage ratio | 9.96 | 9.55 | 4.00 | 4.00 | 5.00 | 5.00 | ||||||||||||||||||
Note 14 | Employment Expenses and Benefit Plans |
F-29
Table of Contents
Note 15 | Stock-Based Compensation |
Options | ||||||||||||||
Year Options | Number of | Exercise Price | Outstanding | |||||||||||
Granted | Stock Options | Per Share | at December 31, 2005 | |||||||||||
2000 | 4,100,000 | $17.69 - 18.06 | 4,100,000 | |||||||||||
2001 | 2,600,000 | 28.99 | 2,600,000 | |||||||||||
2005 | 2004 | 2003 | |||||||||||||||||||||||
Weighted | Weighted | Weighted | |||||||||||||||||||||||
Average | Average | Average | |||||||||||||||||||||||
Exercise | Exercise | Exercise | |||||||||||||||||||||||
Shares | Price | Shares | Price | Shares | Price | ||||||||||||||||||||
Options outstanding at beginning of period | 25,769,908 | $ | 21.51 | 25,473,518 | $ | 20.23 | 25,874,237 | $ | 19.59 | ||||||||||||||||
Options granted | 2,575,053 | 29.02 | 2,724,306 | 26.03 | 2,242,276 | 19.21 | |||||||||||||||||||
Options assumed in connection with acquisitions | — | — | 288,884 | 7.49 | 590,622 | 9.02 | |||||||||||||||||||
Options exercised | (2,551,310 | ) | 17.34 | (2,495,858 | ) | 11.62 | (2,730,176 | ) | 10.93 | ||||||||||||||||
Options cancelled | (246,875 | ) | 23.88 | (220,942 | ) | 23.25 | (503,441 | ) | 19.94 | ||||||||||||||||
Options outstanding at end of period | 25,546,776 | $ | 22.66 | 25,769,908 | $ | 21.51 | 25,473,518 | $ | 20.23 | ||||||||||||||||
Options exercisable at end of period | 12,415,332 | $ | 21.75 | 12,452,702 | $ | 19.88 | 12,722,235 | $ | 17.54 | ||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||
Number of | Weighted Avg. | Weighted Average | Number of | Weighted Avg. | ||||||||||||||||
Range of Exercise Prices | Options | Remaining Term | Exercise Price | Options | Exercise Price | |||||||||||||||
$ 1.75 - $ 4.71 | 10,067 | 3.5 years | $ | 3.35 | 10,067 | $ | 3.35 | |||||||||||||
$ 4.89 - $ 7.50 | 26,135 | 2.4 years | $ | 5.78 | 26,135 | $ | 5.78 | |||||||||||||
$ 7.83 - $11.51 | 324,556 | 2.9 years | $ | 9.67 | 324,556 | $ | 9.67 | |||||||||||||
$12.26 - $18.38 | 7,096,863 | 3.7 years | $ | 17.49 | 3,496,385 | $ | 17.18 | |||||||||||||
$18.69 - $27.98 | 13,385,945 | 5.4 years | $ | 23.47 | 8,051,689 | $ | 23.84 | |||||||||||||
$28.99 - $32.57 | 4,703,210 | 7.2 years | $ | 29.22 | 506,500 | $ | 29.02 | |||||||||||||
F-30
Table of Contents
Year Awards | Market Value | Vesting | ||||||
Granted | at Award Date | Period | ||||||
2002 | $ | 177,786 | 5 years | |||||
2005 | 3,952,644 | 3-7 years | ||||||
(c) | ||||||||||||
(a) | (b) | Number of shares | ||||||||||
Number of securities | Weighted-average | remaining available for | ||||||||||
to be issued | exercise price of | issuance excluding | ||||||||||
upon exercise of | outstanding | shares reflected | ||||||||||
Plan Category(1) | outstanding options | options | in column (a) | |||||||||
Shareholder approved equity compensation plans | 25,039,614 | (2) | $ | 22.90 | 4,853,167 | (3) | ||||||
Non-shareholder approved equity compensation plans | — | — | — | |||||||||
Total | 25,039,614 | $ | 22.90 | 4,853,167 | ||||||||
Note 16 | Fair Value of Financial Instruments |
F-31
Table of Contents
2005 | 2004 | ||||||||||||||||
(In thousands) | Carrying | Estimated | Carrying | Estimated | |||||||||||||
Value | Fair Value | Value | Fair Value | ||||||||||||||
Financial assets: | |||||||||||||||||
Cash and due from banks | $ | 880,886 | 880,886 | 683,035 | 683,035 | ||||||||||||
Interest earning deposits with banks | 2,980 | 2,980 | 4,153 | 4,153 | |||||||||||||
Federal funds sold and securities purchased under resale agreements | 68,922 | 68,922 | 135,471 | 135,471 | |||||||||||||
Trading account assets | 27,322 | 27,322 | — | — | |||||||||||||
Mortgage loans held for sale | 143,144 | 143,283 | 120,186 | 120,301 | |||||||||||||
Investment securities available for sale | 2,958,320 | 2,958,320 | 2,695,593 | 2,695,593 | |||||||||||||
Loans, net | 21,102,735 | 21,066,751 | 19,214,651 | 19,187,678 | |||||||||||||
Financial liabilities: | |||||||||||||||||
Non-interest bearing deposits | 3,700,750 | 3,700,750 | 3,337,908 | 3,337,908 | |||||||||||||
Interest bearing deposits | 17,083,615 | 17,043,482 | 15,239,560 | 15,236,498 | |||||||||||||
Federal funds purchased and securities sold under repurchase agreements | 1,158,669 | 1,158,669 | 1,208,080 | 1,208,080 | |||||||||||||
Long-term debt | 1,933,638 | 1,927,525 | 1,879,583 | 1,876,806 | |||||||||||||
2005 | 2004 | 2003 | ||||||||||||
(In thousands) | ||||||||||||||
Current: | ||||||||||||||
Federal | $ | 331,807 | 215,633 | 189,901 | ||||||||||
State | 24,657 | 12,767 | 5,896 | |||||||||||
Foreign | 4,687 | 1,447 | — | |||||||||||
361,151 | 229,847 | 195,797 | ||||||||||||
Deferred: | ||||||||||||||
Federal | (46,394 | ) | 19,120 | 19,137 | ||||||||||
State | (5,054 | ) | 1,491 | 7,642 | ||||||||||
Foreign | (2,127 | ) | 1,790 | — | ||||||||||
(53,575 | ) | 22,401 | 26,779 | |||||||||||
Total income tax expense | $ | 307,576 | 252,248 | 222,576 | ||||||||||
F-32
Table of Contents
2005 | 2004 | 2003 | |||||||||||
(Dollars in thousands) | |||||||||||||
Taxes at statutory federal income tax rate | $ | 288,408 | 241,248 | 214,025 | |||||||||
Tax-exempt income | (3,745 | ) | (4,124 | ) | (4,553 | ) | |||||||
State income taxes, net of federal income tax benefit | 12,742 | 9,268 | 8,800 | ||||||||||
Minority interest | 13,083 | 10,053 | 9,440 | ||||||||||
Tax credits | (5,793 | ) | (1,980 | ) | (2,403 | ) | |||||||
Other permanent differences, net | 2,881 | (2,217 | ) | (2,733 | ) | ||||||||
Total income tax expense | $ | 307,576 | 252,248 | 222,576 | |||||||||
Effective income tax rate | 37.33 | % | 36.60 | 36.40 | |||||||||
F-33
Table of Contents
2005 | 2004 | |||||||||
(In thousands) | ||||||||||
Deferred income tax assets: | ||||||||||
Provision for losses on loans | $ | 119,850 | 107,808 | |||||||
Finance lease transactions | 25,998 | — | ||||||||
Net operating loss and income tax credit carryforwards | 16,081 | 20,485 | ||||||||
Deferred revenue | 11,265 | — | ||||||||
Deferred compensation | 5,051 | 5,299 | ||||||||
Net unrealized loss on cash flow hedges | 3,957 | 2,527 | ||||||||
Net unrealized loss on investment securities available for sale | 17,831 | 83 | ||||||||
Other | 9,245 | 15,209 | ||||||||
Total gross deferred income tax assets | 209,278 | 151,411 | ||||||||
Less valuation allowance | (2,241 | ) | (1,853 | ) | ||||||
Total net deferred income tax assets | $ | 207,037 | 149,558 | |||||||
Deferred income tax liabilities: | ||||||||||
Finance lease transactions | — | (29,250 | ) | |||||||
Differences in depreciation | (116,097 | ) | (79,891 | ) | ||||||
Computer software development costs | (37,160 | ) | (38,154 | ) | ||||||
Purchase accounting adjustments | (14,916 | ) | (17,229 | ) | ||||||
Differences in revenue recognition | — | (11,374 | ) | |||||||
Foreign currency translation | (3,424 | ) | (8,754 | ) | ||||||
Ownership interest in partnership | (2,739 | ) | (6,062 | ) | ||||||
Other | (12,100 | ) | (17,439 | ) | ||||||
Total gross deferred income tax liabilities | (186,436 | ) | (208,153 | ) | ||||||
Net deferred income tax asset (liability) | $ | 20,601 | (58,595 | ) | ||||||
Note 18 | Operating Segments |
F-34
Table of Contents
Financial | |||||||||||||||||||||
Year | Services | TSYS(a) | Eliminations | Consolidated | |||||||||||||||||
(In thousands) | |||||||||||||||||||||
Interest income | 2005 | $ | 1,496,262 | 3,873 | (3,910 | )(b) | 1,496,225 | ||||||||||||||
2004 | 1,159,020 | 1,348 | (1,348 | )(b) | 1,159,020 | ||||||||||||||||
2003 | 1,061,522 | 747 | (777 | )(b) | 1,061,492 | ||||||||||||||||
Interest expense | 2005 | 531,046 | 242 | (3,910 | )(b) | 527,378 | |||||||||||||||
2004 | 299,489 | 200 | (1,348 | )(b) | 298,341 | ||||||||||||||||
2003 | 299,066 | 139 | (777 | )(b) | 298,428 | ||||||||||||||||
Net interest income | 2005 | 965,216 | 3,631 | — | 968,847 | ||||||||||||||||
2004 | 859,531 | 1,148 | — | 860,679 | |||||||||||||||||
2003 | 762,456 | 608 | — | 763,064 | |||||||||||||||||
Provision for losses on loans | 2005 | 82,532 | — | — | 82,532 | ||||||||||||||||
2004 | 75,319 | — | — | 75,319 | |||||||||||||||||
2003 | 71,777 | — | — | 71,777 | |||||||||||||||||
Net interest income after provision | 2005 | 882,684 | 3,631 | — | 886,315 | ||||||||||||||||
for losses on loans | 2004 | 784,212 | 1,148 | — | 785,360 | ||||||||||||||||
2003 | 690,679 | 608 | — | 691,287 | |||||||||||||||||
Total non-interest income | 2005 | 327,412 | 1,611,897 | (20,830 | )(c) | 1,918,479 | |||||||||||||||
2004 | 327,441 | 1,212,414 | (18,844 | )(c) | 1,521,011 | ||||||||||||||||
2003 | 311,023 | 1,074,457 | (16,151 | )(c) | 1,369,329 | ||||||||||||||||
Total non-interest expense | 2005 | 646,757 | 1,317,464 | (20,830 | )(c) | 1,943,391 | |||||||||||||||
2004 | 621,674 | 985,536 | (18,844 | )(c) | 1,588,366 | ||||||||||||||||
2003 | 575,407 | 862,887 | (16,151 | )(c) | 1,422,143 | ||||||||||||||||
Income before taxes | 2005 | 563,339 | 298,064 | (37,381 | )(d) | 824,022 | |||||||||||||||
2004 | 489,979 | 228,026 | (28,724 | )(d) | 689,281 | ||||||||||||||||
2003 | 426,295 | 212,178 | (26,972 | )(d) | 611,501 | ||||||||||||||||
Income tax expense | 2005 | 204,289 | 103,287 | — | 307,576 | ||||||||||||||||
2004 | 175,039 | 77,209 | — | 252,248 | |||||||||||||||||
2003 | 151,709 | 70,867 | — | 222,576 | |||||||||||||||||
Net income | 2005 | 359,050 | 194,777 | (37,381 | )(d) | 516,446 | |||||||||||||||
2004 | 314,940 | 150,817 | (28,724 | )(d) | 437,033 | ||||||||||||||||
2003 | 274,586 | 141,311 | (26,972 | )(d) | 388,925 | ||||||||||||||||
Total assets | 2005 | 26,401,125 | 1,395,633 | (176,086 | )(e) | 27,620,672 | |||||||||||||||
2004 | 23,966,347 | 1,241,797 | (157,966 | )(e) | 25,050,178 | ||||||||||||||||
2003 | 20,715,606 | 1,000,836 | (83,813 | )(e) | 21,632,629 |
(a) | Includes equity in income of joint ventures which is included in non-interest income. | |
(b) | Interest on TSYS’ cash deposits with the Financial Services segment and on TSYS’ line of credit with a Synovus bank. | |
(c) | Primarily, electronic payment processing services and other services provided by TSYS to the Financial Services segment. | |
(d) | Minority interest in TSYS and GP Net (a TSYS subsidiary). | |
(e) | Primarily TSYS’ cash deposits with the Financial Services segment. |
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Financial | ||||||||||||
Services | TSYS | Consolidated | ||||||||||
(In thousands) | ||||||||||||
Balance as of December 31, 2003 | $ | 219,242 | 29,626 | 248,868 | ||||||||
Goodwill acquired | 126,480 | 40,931 | 167,411 | |||||||||
Impairment losses | — | — | — | |||||||||
Currency translation adjustments(3) | — | 4 | 4 | |||||||||
Balance as of December 31, 2004 | $ | 345,722 | 70,561 | 416,283 | ||||||||
Goodwill acquired | 235 | (1) | 43,632 | (2) | 43,867 | |||||||
Impairment losses | — | — | — | |||||||||
Currency translation adjustments(3) | — | (16 | ) | (16 | ) | |||||||
Other | (440 | )(4) | (1,312 | )(5) | (1,752 | ) | ||||||
Balance as of December 31, 2005 | $ | 345,517 | 112,865 | 458,382 | ||||||||
(1) | $226 thousand pertains to contingent consideration relating to the GLOBALT acquisition. The remaining $9 thousand pertains to additional acquisition expenses related to the Trust One acquisition. See Note 2 for additional information on these business combinations. |
(2) | Goodwill acquired during 2005 consists of $36.7 million in goodwill based on the preliminary purchase price allocation for the Vital acquisition which was completed on March 1, 2005. $4.9 million in additional goodwill consists of fifty percent of the previously recorded goodwill on Vital’s balance sheet, which is now being consolidated in TSYS’ balance sheet. The remaining $2.0 million in goodwill relates to the acquisition of Merlin Solutions, L.L.C. See Note 2 for additional information regarding these acquisitions. |
(3) | Consists of foreign currency translation adjustments for GP Net. |
(4) | During 2005, Synovus recorded a reduction in goodwill of $440 thousand associated with the sale of two bank charters. |
(5) | On August 2, 2004, TSYS completed the acquisition of Clarity. During 2005, TSYS recorded a final adjustment to the purchase price allocation, which resulted in a $1.3 million reduction in other liabilities with a corresponding $1.3 million decrease in goodwill. |
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Note 19 | Condensed Financial Information of Synovus Financial Corp. (Parent Company only) |
Condensed Balance Sheets | |||||||||||
December 31, | |||||||||||
(In thousands) | |||||||||||
2005 | 2004 | ||||||||||
�� | |||||||||||
Assets | |||||||||||
Cash | $ | 1,747 | 4,911 | ||||||||
Investment in consolidated bank subsidiaries, at equity (including TSYS) | 3,383,050 | 3,018,729 | |||||||||
Investment in consolidated nonbank subsidiaries, at equity | 53,829 | 29,698 | |||||||||
Notes receivable from bank subsidiaries | 197,677 | 27,278 | |||||||||
Notes receivable from nonbank subsidiaries | 4,014 | 1,630 | |||||||||
Other assets | 137,009 | 143,916 | |||||||||
Total assets | $ | 3,777,326 | 3,226,162 | ||||||||
Liabilities and Shareholders’ Equity | |||||||||||
Liabilities: | |||||||||||
Long-term debt | $ | 759,369 | 513,203 | ||||||||
Other liabilities | 68,628 | 71,670 | |||||||||
Total liabilities | 827,997 | 584,873 | |||||||||
Shareholders’ equity: | |||||||||||
Common stock | 318,301 | 315,636 | |||||||||
Surplus | 686,447 | 628,396 | |||||||||
Treasury stock | (113,944 | ) | (113,944 | ) | |||||||
Unearned compensation | (3,126 | ) | (106 | ) | |||||||
Accumulated other comprehensive income (loss) | (29,536 | ) | 8,903 | ||||||||
Retained earnings | 2,091,187 | 1,802,404 | |||||||||
Total shareholders’ equity | 2,949,329 | 2,641,289 | |||||||||
Total liabilities and shareholders’ equity | $ | 3,777,326 | 3,226,162 | ||||||||
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Condensed Statements of Income | ||||||||||||||
Years Ended December 31, | ||||||||||||||
2005 | 2004 | 2003 | ||||||||||||
(In thousands) | ||||||||||||||
Income: | ||||||||||||||
Dividends received from bank subsidiaries (including TSYS) | $ | 251,202 | 228,586 | 230,580 | ||||||||||
Information technology fees from affiliates | 68,890 | 63,205 | 62,301 | |||||||||||
Securities gains (losses), net | 166 | — | (209 | ) | ||||||||||
Interest income | 3,698 | 7,308 | 10,591 | |||||||||||
Other income | 33,534 | 45,035 | 21,873 | |||||||||||
Total income | 357,490 | 344,134 | 325,136 | |||||||||||
Expenses: | ||||||||||||||
Interest expense | 41,560 | 27,200 | 31,807 | |||||||||||
Other expenses | 166,856 | 141,603 | 125,964 | |||||||||||
Total expenses | 208,416 | 168,803 | 157,771 | |||||||||||
Income before income taxes and equity in undistributed income of subsidiaries | 149,074 | 175,331 | 167,365 | |||||||||||
Allocated income tax benefit | (38,471 | ) | (20,513 | ) | (23,832 | ) | ||||||||
Income before equity in undistributed income of subsidiaries | 187,545 | 195,844 | 191,197 | |||||||||||
Equity in undistributed income of subsidiaries | 328,901 | 241,189 | 197,728 | |||||||||||
Net income | $ | 516,446 | 437,033 | 388,925 | ||||||||||
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Condensed Statements of Cash Flows | |||||||||||||||
Years ended December 31, | |||||||||||||||
(In thousands) | |||||||||||||||
2005 | 2004 | 2003 | |||||||||||||
Operating Activities | |||||||||||||||
Net income | $ | 516,446 | 437,033 | 388,925 | |||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Equity in undistributed income of subsidiaries | (328,901 | ) | (241,189 | ) | (197,728 | ) | |||||||||
Depreciation, amortization, and accretion, net | 17,243 | 17,365 | 16,428 | ||||||||||||
Net increase (decrease) in other liabilities | (3,029 | ) | 20,784 | 5,469 | |||||||||||
Net (increase) decrease in other assets | 7,302 | (15,522 | ) | (23,762 | ) | ||||||||||
Other, net | (508 | ) | (10,180 | ) | 2,871 | ||||||||||
Net cash provided by operating activities | 208,553 | 208,291 | 192,203 | ||||||||||||
Investing Activities | |||||||||||||||
Net investment in subsidiaries | (85,887 | ) | (73,920 | ) | (52,864 | ) | |||||||||
Cash paid for acquisitions | (10 | ) | (32,077 | ) | (80,400 | ) | |||||||||
Cash proceeds from sales of subsidiaries | — | 26,164 | 5,181 | ||||||||||||
Purchases of premises & equipment | (17,503 | ) | (18,364 | ) | (14,201 | ) | |||||||||
Net (increase) decrease in short-term notes receivable from bank subsidiaries | (170,399 | ) | 81,559 | 9,212 | |||||||||||
Net (increase) decrease in short-term notes receivable from nonbank subsidiaries | (2,384 | ) | (899 | ) | 1,634 | ||||||||||
Net cash used in investing activities | (276,183 | ) | (17,537 | ) | (131,438 | ) | |||||||||
Financing Activities | |||||||||||||||
Dividends paid to shareholders | (224,303 | ) | (209,883 | ) | (194,177 | ) | |||||||||
Purchase of treasury stock | — | (4 | ) | (112,655 | ) | ||||||||||
Principal repayments on long-term debt | (200,000 | ) | — | (81,959 | ) | ||||||||||
Proceeds from issuance of long-term debt | 445,644 | — | 300,000 | ||||||||||||
Proceeds from issuance of common stock | 43,125 | 23,465 | 28,070 | ||||||||||||
Net cash provided by (used in) financing activities | 64,466 | (186,422 | ) | (60,721 | ) | ||||||||||
Increase (decrease) in cash | (3,164 | ) | 4,332 | 44 | |||||||||||
Cash at beginning of period | 4,911 | 579 | 535 | ||||||||||||
Cash at end of period | $ | 1,747 | 4,911 | 579 | |||||||||||
Years ended December 31, | |||||||||||||
2005 | 2004 | 2003 | |||||||||||
(In thousands) | |||||||||||||
Income: | |||||||||||||
Equity in income of joint ventures | $ | 6,135 | 23,736 | 17,810 | |||||||||
Expenses: | |||||||||||||
Stationery, printing, and supplies | 37,245 | 33,273 | 34,128 | ||||||||||
Third-party processing services | 66,464 | 30,057 | 27,518 | ||||||||||
Attorney commissions and court costs | 32,116 | 33,930 | 12,433 | ||||||||||
Consulting fees | 33,954 | 15,594 | 11,376 | ||||||||||
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F-40
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Richard E. Anthony | Thomas J. Prescott | |
President & | Executive Vice President & | |
Chief Executive Officer | Chief Financial Officer |
F-41
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F-42
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Years Ended December 31, | |||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||
Income Statement: | |||||||||||||||||||||
Total revenues (a) | $ | 2,886,863 | 2,381,615 | 2,129,902 | 1,949,688 | 1,792,286 | |||||||||||||||
Net interest income | 968,847 | 860,679 | 763,064 | 717,504 | 629,791 | ||||||||||||||||
Provision for losses on loans | 82,532 | 75,319 | 71,777 | 65,327 | 51,673 | ||||||||||||||||
Non-interest income | 1,918,479 | 1,521,011 | 1,369,329 | 1,234,822 | 1,164,217 | ||||||||||||||||
Non-interest expense | 1,943,391 | 1,588,366 | 1,422,143 | 1,299,470 | 1,232,483 | ||||||||||||||||
Net income | 516,446 | 437,033 | 388,925 | 365,347 | 311,616 | ||||||||||||||||
Per share data: | |||||||||||||||||||||
Net income - basic | 1.66 | 1.42 | 1.29 | 1.23 | 1.07 | ||||||||||||||||
Net income - diluted | 1.64 | 1.41 | 1.28 | 1.21 | 1.05 | ||||||||||||||||
Cash dividends declared | 0.73 | 0.69 | 0.66 | 0.59 | 0.51 | ||||||||||||||||
Book value | 9.43 | 8.52 | 7.43 | 6.79 | 5.75 | ||||||||||||||||
Balance Sheet: | |||||||||||||||||||||
Investment securities | 2,958,320 | 2,695,593 | 2,529,257 | 2,237,725 | 2,088,287 | ||||||||||||||||
Loans, net of unearned income | 21,392,347 | 19,480,396 | 16,464,914 | 14,463,909 | 12,417,917 | ||||||||||||||||
Deposits | 20,784,365 | 18,577,468 | 15,941,609 | 13,928,834 | 12,146,198 | ||||||||||||||||
Long-term debt | 1,933,638 | 1,879,583 | 1,575,777 | 1,336,200 | 1,052,943 | ||||||||||||||||
Shareholders’ equity | 2,949,329 | 2,641,289 | 2,245,039 | 2,040,853 | 1,694,946 | ||||||||||||||||
Average total shareholders’ equity | 2,799,496 | 2,479,404 | 2,166,777 | 1,855,492 | 1,548,030 | ||||||||||||||||
Average total assets | 26,291,484 | 23,275,001 | 20,412,853 | 17,414,654 | 15,375,004 | ||||||||||||||||
Performance ratios and other data: | |||||||||||||||||||||
Return on average assets | 1.96 | % | 1.88 | 1.91 | 2.10 | 2.03 | |||||||||||||||
Return on average equity | 18.45 | 17.63 | 17.95 | 19.69 | 20.13 | ||||||||||||||||
Net interest margin, before fees | 4.05 | 3.92 | 3.90 | 4.27 | 4.28 | ||||||||||||||||
Net interest margin, after fees | 4.19 | 4.22 | 4.26 | 4.65 | 4.65 | ||||||||||||||||
Efficiency ratio(b) | 49.79 | 52.06 | 53.34 | 52.07 | 53.80 | ||||||||||||||||
Dividend payout ratio(c) | 44.51 | 48.94 | 51.56 | 48.76 | 48.57 | ||||||||||||||||
Average shareholders’ equity to average assets | 10.65 | 10.65 | 10.61 | 10.65 | 10.07 | ||||||||||||||||
Average shares outstanding, basic | 311,495 | 307,262 | 302,010 | 297,325 | 290,304 | ||||||||||||||||
Average shares outstanding, diluted | 314,815 | 310,330 | 304,928 | 301,197 | 295,850 |
(a) | Consists of net interest income and non-interest income, excluding securities gains (losses). | |
(b) | For the Financial Services segment. | |
(c) | Determined by dividing dividends declared per share (excluding pooled subsidiaries) by diluted net income per share. |
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Table of Contents
• Loan Growth | • Credit Quality | |
• Deposit Growth | • Fee Income Growth | |
• Net Interest Margin | • Expense Management |
• Revenue Growth | • Expense Management |
• | Net income $516.4 million, up 18.2% | |
• | Diluted earnings per share (EPS) $1.64, up 16.5% |
• | Loan growth: 9.8% | |
• | Deposit growth: 11.9% (13.6% excluding brokered deposits). | |
• | Net interest margin before fees: 4.05%, up 13 basis points from 3.92% in 2004. | |
• | Net interest margin after fees: 4.19%, down 3 basis points from 4.22% in 2004. | |
• | Credit quality: |
• | Nonperforming assets (NPA) ratio of .46%, down from .52% at year-end 2004, and | |
• | Past dues over 90 days as a percentage of total loans of .07% compared to .09% at year-end 2004, and | |
• | Net charge-off ratio of .29%, compared to .23% for 2004. |
• | Fee income growth: Unchanged from 2004 (up 5.1% excluding the $15.8 million pre-tax gain from the sale of the Quincy bank operations in 2004). | |
• | General and administrative expenses: up 4% (9.4% increase excluding impact of acquisitions and change in classification methodology relating to loan origination costs). | |
• | Net income growth: 14.0% |
• | Net income growth: 29.2% | |
• | Revenue growth before reimbursable items: 34.8% (10.3% excluding the impact of the acquisition of Vital and TSYS Prepaid). | |
• | Expense growth before reimbursable items: 32.9% (10.2% excluding the impact of the acquisition of Vital and TSYS Prepaid). | |
• | Accounts on file processed on TSYS’ systems increased 22.4% to 437.9 million at December 31, 2005, compared to 357.6 million at December 31, 2004. |
• | TSYS acquired the remaining 50% interest in Vital Processing Services, L.L.C. (Vital) from Visa U.S.A. (Visa) effective March 1, 2005. | |
• | TSYS signed an agreement with Capital One Financial Corporation (Capital One) to provide processing |
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services for its North American portfolio of consumer and small business credit card accounts. | ||
• | TSYS successfully converted the account portfolio of JPMorgan Chase & Co. (Chase). | |
• | TSYS concluded its negotiations with Citibank related to continuing its processing services for the Sears, Roebuck and Co. card portfolio. TSYS received official notification that Citibank plans to migrate all of the Sears consumer MasterCard and private label accounts from TSYS in a deconversion that is scheduled to occur in May 2006. TSYS expects to continue supporting commercial-card accounts for Citibank, as well as Citibank’s Banamex USA consumer accounts, according to the terms of the existing agreements for these portfolios. | |
• | In December 2005, TSYS received official notification from Bank of America of its intent to shift the processing of its consumer card portfolio in house in October 2006 in connection with the acquisition of MBNA Corporation (MBNA). |
• | Modest increases in short-term interest rates. | |
• | A favorable credit environment. | |
• | TSYS’ earnings growth in the 21% to 23% range. | |
• | Incremental (as compared to 2005) equity-based compensation expense of approximately 5 cents per diluted share, or 3.2% of reported 2005 diluted earnings per share. |
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F-46
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F-47
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F-48
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Table 1 Acquisitions | |||||||||||||||||
(Dollars in thousands) | Total | Shares | |||||||||||||||
Company and Location | Date Closed | Assets | Issued | Cash | |||||||||||||
Vital Processing Services, L.L.C. (Vital) | March 1, 2005 | $ | 128,679 | — | $ | 95,794 | |||||||||||
Tempe, Arizona | |||||||||||||||||
Clarity Payment Solutions, Inc. (TSYS Prepaid, Inc.) | August 2, 2004 | 74,430 | — | 53,000 | |||||||||||||
New York, New York | |||||||||||||||||
Trust One Bank | June 1, 2004 | 513,000 | 3,841,302 | — | |||||||||||||
Memphis, Tennessee | |||||||||||||||||
Peoples Florida Banking Corporation | January 30, 2004 | 324,000 | 1,636,827 | 32,100 | |||||||||||||
Palm Harbor, Florida | |||||||||||||||||
Enhancement Services Corporation | April 28, 2003 | 43,230 | — | 36,000 | |||||||||||||
Roswell, Georgia | |||||||||||||||||
United Financial Holdings, Inc. | February 28, 2003 | 490,000 | 2,388,087 | 34,000 | |||||||||||||
St. Petersburg, Florida | |||||||||||||||||
FNB Newton Bancshares, Inc. | February 27, 2003 | 445,000 | 2,253,627 | 46,408 | |||||||||||||
Covington, Georgia | |||||||||||||||||
GLOBALT, Inc. | May 31, 2002 | 23,000 | 702,433 | — | |||||||||||||
Atlanta, Georgia |
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Years Ended December 31, | |||||||||||||
(In thousands) | |||||||||||||
2005 | 2004 | 2003 | |||||||||||
Interest income | $ | 1,496,225 | 1,159,020 | 1,061,492 | |||||||||
Taxable-equivalent adjustment | 6,439 | 6,960 | 7,388 | ||||||||||
Interest income, taxable-equivalent | 1,502,664 | 1,165,980 | 1,068,880 | ||||||||||
Interest expense | 527,378 | 298,341 | 298,428 | ||||||||||
Net interest income, taxable-equivalent | $ | 975,286 | 867,639 | 770,452 | |||||||||
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Table 3 | Consolidated Average Balances, Interest, and Yields |
2005 | 2004 | 2003 | ||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Average | Yield/ | Average | Yield/ | Average | Yield/ | ||||||||||||||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||
Interest earning assets: | ||||||||||||||||||||||||||||||||||||||
Taxable loans, net(a)(b) | $ | 20,406,102 | 1,372,428 | 6.73 | % | $ | 17,881,572 | 1,048,337 | 5.86 | % | $ | 15,556,295 | 948,351 | 6.10 | % | |||||||||||||||||||||||
Tax-exempt loans, net(a)(b)(c) | 63,582 | 4,265 | 6.71 | 71,394 | 4,257 | 5.96 | 69,924 | 4,950 | 7.08 | |||||||||||||||||||||||||||||
Allowance for loan losses | (279,534 | ) | — | — | (247,054 | ) | — | — | (220,004 | ) | — | — | ||||||||||||||||||||||||||
Loans, net | 20,190,150 | 1,376,693 | 6.82 | 17,705,912 | 1,052,594 | 5.94 | 15,406,215 | 953,301 | 6.19 | |||||||||||||||||||||||||||||
Investment securities available for sale: | ||||||||||||||||||||||||||||||||||||||
Taxable investment securities | 2,609,113 | 98,728 | 3.78 | 2,366,631 | 88,560 | 3.74 | 2,065,924 | 83,727 | 4.05 | |||||||||||||||||||||||||||||
Tax-exempt investment securities(c) | 216,773 | 15,044 | 6.94 | 230,815 | 16,268 | 7.05 | 235,401 | 16,920 | 7.19 | |||||||||||||||||||||||||||||
Total investment securities | 2,825,886 | 113,772 | 4.03 | 2,597,446 | 104,828 | 4.04 | 2,301,325 | 100,647 | 4.37 | |||||||||||||||||||||||||||||
Trading account assets | 11,380 | 642 | 5.64 | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Interest earning deposits with banks | 6,362 | 172 | 2.70 | 4,197 | 32 | 0.76 | 4,515 | 25 | 0.55 | |||||||||||||||||||||||||||||
Federal funds sold and securities purchased under resale agreements | 120,809 | 4,082 | 3.38 | 148,685 | 1,945 | 1.31 | 111,893 | 1,546 | 1.38 | |||||||||||||||||||||||||||||
Mortgage loans held for sale | 113,969 | 7,303 | 6.41 | 117,479 | 6,581 | 5.60 | 254,240 | 13,361 | 5.26 | |||||||||||||||||||||||||||||
Total interest earning assets | 23,268,556 | 1,502,664 | 6.46 | 20,573,719 | 1,165,980 | 5.67 | 18,078,188 | 1,068,880 | 5.91 | |||||||||||||||||||||||||||||
Cash and due from banks | 706,158 | 655,069 | 594,097 | |||||||||||||||||||||||||||||||||||
Premises and equipment, net | 913,551 | 855,197 | 714,255 | |||||||||||||||||||||||||||||||||||
Other real estate | 22,690 | 26,420 | 28,273 | |||||||||||||||||||||||||||||||||||
Other assets(d) | 1,380,535 | 1,164,596 | 998,040 | |||||||||||||||||||||||||||||||||||
Total assets | $ | 26,291,490 | $ | 23,275,001 | $ | 20,412,853 | ||||||||||||||||||||||||||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||
Interest bearing liabilities: | ||||||||||||||||||||||||||||||||||||||
Interest bearing demand deposits | $ | 2,975,016 | 35,085 | 1.18 | $ | 2,762,104 | 16,764 | 0.61 | $ | 2,515,161 | 17,779 | 0.71 | ||||||||||||||||||||||||||
Money market accounts | 5,193,943 | 132,739 | 2.56 | 4,481,042 | 54,387 | 1.21 | 3,695,601 | 41,086 | 1.11 | |||||||||||||||||||||||||||||
Savings deposits | 555,205 | 1,958 | 0.35 | 548,736 | 1,002 | 0.18 | 502,246 | 1,243 | 0.25 | |||||||||||||||||||||||||||||
Time deposits (less brokered time deposits) | 4,918,781 | 150,809 | 3.07 | 4,481,935 | 103,683 | 2.31 | 5,121,955 | 138,717 | 2.71 | |||||||||||||||||||||||||||||
Brokered time deposits | 2,557,660 | 86,714 | 3.39 | 1,730,937 | 40,448 | 2.34 | 726,316 | 18,736 | 2.58 | |||||||||||||||||||||||||||||
Federal funds purchased and securities sold under repurchase agreements | 1,103,005 | 31,569 | 2.86 | 1,479,815 | 19,286 | 1.30 | 1,101,216 | 11,829 | 1.07 | |||||||||||||||||||||||||||||
Long-term debt | 2,087,749 | 88,504 | 4.24 | 1,718,556 | 62,771 | 3.65 | 1,639,487 | 69,038 | 4.21 | |||||||||||||||||||||||||||||
Total interest bearing liabilities | 19,391,359 | 527,378 | 2.72 | 17,203,125 | 298,341 | 1.73 | 15,301,982 | 298,428 | 1.95 | |||||||||||||||||||||||||||||
Non-interest bearing demand deposits | 3,408,289 | 3,048,465 | 2,501,539 | |||||||||||||||||||||||||||||||||||
Other liabilities | 692,346 | 544,007 | 442,555 | |||||||||||||||||||||||||||||||||||
Shareholders’ equity | 2,799,496 | 2,479,404 | 2,166,777 | |||||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 26,291,490 | $ | 23,275,001 | $ | 20,412,853 | ||||||||||||||||||||||||||||||||
Net interest income/margin | 975,286 | 4.19 | % | 867,639 | 4.22 | % | 770,452 | 4.26 | % | |||||||||||||||||||||||||||||
Taxable-equivalent adjustment | (6,439 | ) | (6,960 | ) | (7,388 | ) | ||||||||||||||||||||||||||||||||
Net interest income, actual | $ | 968,847 | $ | 860,679 | $ | 763,064 | ||||||||||||||||||||||||||||||||
(a) | Average loans are shown net of unearned income. Nonperforming loans are included. |
(b) | Interest income includes loan fees as follows: 2005 - $33.5 million, 2004 - $60.4 million, 2003 - $65.7 million. |
(c) | Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 35%, in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis. |
(d) | Includes average net unrealized gains (losses) on investment securities available for sale of ($22.6) million, $12.6 million, and $48.8 million for the years ended December 31, 2005, 2004, and 2003, respectively. |
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2005 Compared to 2004 | 2004 Compared to 2003 | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Change Due to (a) | Change Due to (a) | |||||||||||||||||||||||||
Yield/ | Net | Yield/ | Net | |||||||||||||||||||||||
Volume | Rate | Change | Volume | Rate | Change | |||||||||||||||||||||
Interest earned on: | ||||||||||||||||||||||||||
Taxable loans, net | $ | 147,937 | 176,154 | 324,091 | 141,842 | (41,856 | ) | 99,986 | ||||||||||||||||||
Tax-exempt loans, net (b) | (466 | ) | 474 | 8 | 104 | (797 | ) | (693 | ) | |||||||||||||||||
Taxable investment securities | 9,069 | 1,099 | 10,168 | 12,179 | (7,346 | ) | 4,833 | |||||||||||||||||||
Tax-exempt investment securities (b) | (990 | ) | (234 | ) | (1,224 | ) | (330 | ) | (322 | ) | (652 | ) | ||||||||||||||
Trading account assets | 642 | — | 642 | — | — | — | ||||||||||||||||||||
Interest earning deposits with banks | 16 | 124 | 140 | (2 | ) | 9 | 7 | |||||||||||||||||||
Federal funds sold and securities purchased under resale agreements | (365 | ) | 2,502 | 2,137 | 508 | (109 | ) | 399 | ||||||||||||||||||
Mortgage loans held for sale | (197 | ) | 919 | 722 | (7,194 | ) | 414 | (6,780 | ) | |||||||||||||||||
Total interest income | 155,646 | 181,038 | 336,684 | 147,107 | (50,007 | ) | 97,100 | |||||||||||||||||||
Interest paid on: | ||||||||||||||||||||||||||
Interest bearing demand deposits | 1,299 | 17,022 | 18,321 | 1,753 | (2,768 | ) | (1,015 | ) | ||||||||||||||||||
Money market accounts | 8,626 | 69,726 | 78,352 | 8,718 | 4,583 | 13,301 | ||||||||||||||||||||
Savings deposits | 12 | 944 | 956 | 116 | (357 | ) | (241 | ) | ||||||||||||||||||
Time deposits (excluding brokered time deposits) | 10,091 | 37,035 | 47,126 | (16,728 | ) | (18,306 | ) | (35,034 | ) | |||||||||||||||||
Brokered time deposits | 19,345 | 26,921 | 46,266 | 26,536 | (4,824 | ) | 21,712 | |||||||||||||||||||
Federal funds purchased and securities sold under repurchase agreements | (4,899 | ) | 17,182 | 12,283 | 4,051 | 3,406 | 7,457 | |||||||||||||||||||
Other borrowed funds | 13,476 | 12,257 | 25,733 | 3,329 | (9,596 | ) | (6,267 | ) | ||||||||||||||||||
Total interest expense | 47,950 | 181,087 | 229,037 | 27,775 | (27,862 | ) | (87 | ) | ||||||||||||||||||
Net interest income | $ | 107,696 | (49 | ) | 107,647 | 119,332 | (22,145 | ) | 97,187 | |||||||||||||||||
(a) | The change in interest due to both rate and volume has been allocated to the rate component. | |
(b) | Reflects taxable-equivalent adjustments using the statutory federal income tax rate of 35% in adjusting interest on tax-exempt loans and investment securities to a taxable-equivalent basis. |
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Accounts on File (AOF) Information | Percent Change | |||||||||||||||||||
(in millions) | ||||||||||||||||||||
2005 | 2004 | 2003 | 2005 vs. 2004 | 2004 vs. 2003 | ||||||||||||||||
At December 31 | 437.9 | 357.6 | 273.9 | 22.4 | % | 30.5 | % | |||||||||||||
YTD Average | 401.1 | 303.1 | 262.6 | 32.3 | 15.4 | |||||||||||||||
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Table 5 | Non-Interest Income - Financial Services Segment |
2005 | 2004 | 2003 | |||||||||||
(In thousands) | |||||||||||||
Service charges on deposits | $ | 112,788 | 121,450 | 107,697 | |||||||||
Fiduciary and asset management fees | 45,453 | 43,757 | 39,922 | ||||||||||
Brokerage and investment banking revenue | 24,487 | 21,748 | 20,461 | ||||||||||
Mortgage banking income | 28,682 | 26,300 | 58,633 | ||||||||||
Bankcard fees | 37,638 | 30,174 | 25,751 | ||||||||||
Securities gains, net | 463 | 75 | 2,491 | ||||||||||
Other fee income | 32,914 | 29,227 | 23,682 | ||||||||||
Other operating income | 44,987 | 54,710 | 32,386 | ||||||||||
Total non-interest income | $ | 327,412 | 327,441 | 311,023 | |||||||||
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• | The change in classification methodology for recording loan origination fees and costs (described in “Earning Assets, Sources of Funds, and Net Interest Income”) resulted in a decrease in salaries and other personnel expense of $37.7 million. | |
• | Total performance-based incentive compensation was approximately $51.1 million in 2005, a $14.4 million increase from 2004 levels. | |
• | The total increase related to the net effect of acquisitions and divestitures completed in 2004 was $2.0 million. |
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(In thousands)
2005 * | 2004 * | 2003 * | |||||||||||||||||||||||
Transaction | Transaction | Transaction | |||||||||||||||||||||||
Financial | Processing | Financial | Processing | Financial | Processing | ||||||||||||||||||||
Services | Services | Services | Services | Services | Services | ||||||||||||||||||||
Salaries and other personnel expense | $ | 370,223 | 466,901 | 364,514 | 367,881 | 340,219 | 332,616 | ||||||||||||||||||
Net occupancy and equipment expense | 90,549 | 277,671 | 82,156 | 239,534 | 75,841 | 205,845 | |||||||||||||||||||
Other operating expenses | 185,985 | 259,751 | 175,004 | 147,732 | 159,347 | 99,261 | |||||||||||||||||||
Total non-interest expense before reimbursable items | 646,757 | 1,004,323 | 621,674 | 755,147 | 575,407 | 637,722 | |||||||||||||||||||
Reimbursable items | — | 313,141 | — | 230,388 | — | 225,165 | |||||||||||||||||||
Total non-interest expense | $ | 646,757 | 1,317,464 | 621,674 | 985,535 | 575,407 | 862,887 | ||||||||||||||||||
* | The added totals are greater than the consolidated totals due to inter-segment balances which are eliminated in consolidation. |
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December 31, | |||||||||||||
2005 | 2004 | 2003 | |||||||||||
U.S. Treasury and U.S. Government agency securities | $ | 1,624,612 | 1,305,471 | 1,353,825 | |||||||||
Mortgage-backed securities | 1,006,728 | 1,026,724 | 847,007 | ||||||||||
State and municipal securities | 212,371 | 237,832 | 248,738 | ||||||||||
Other investments | 114,609 | 125,566 | 79,687 | ||||||||||
Total | $ | 2,958,320 | 2,695,593 | 2,529,257 | |||||||||
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Table 8 | Maturities and Average Yields of Investment Securities Available for Sale |
December 31, 2005 | ||||||||||
(Dollars in thousands) | ||||||||||
Investment Securities | ||||||||||
Available for Sale | ||||||||||
Estimated | Average | |||||||||
Fair Value | Yield | |||||||||
U.S. Treasury and U.S. Government agency securities: | ||||||||||
Within 1 year | $ | 295,922 | 2.94 | % | ||||||
1 to 5 years | 1,164,529 | 3.84 | ||||||||
5 to 10 years | 139,969 | 4.92 | ||||||||
More than 10 years | 24,192 | 5.80 | ||||||||
Total | $ | 1,624,612 | 3.80 | |||||||
State and municipal securities: | ||||||||||
Within 1 year | $ | 19,722 | 6.71 | |||||||
1 to 5 years | 83,639 | 6.84 | ||||||||
5 to 10 years | 79,172 | 7.45 | ||||||||
More than 10 years | 29,838 | 7.61 | ||||||||
Total | $ | 212,371 | 7.16 | |||||||
Other investments: | ||||||||||
Within 1 year | $ | 264 | 3.97 | |||||||
1 to 5 years | 1,350 | 3.88 | ||||||||
5 to 10 years | — | — | ||||||||
More than 10 years | 189 | — | ||||||||
Total | $ | 1,803 | 3.49 | |||||||
Equity securities | $ | 112,806 | 4.63 | |||||||
Mortgage-backed securities | $ | 1,006,728 | 4.22 | |||||||
Total investment securities: | ||||||||||
Within 1 year | $ | 315,908 | 3.18 | |||||||
1 to 5 years | 1,249,518 | 4.04 | ||||||||
5 to 10 years | 219,141 | 5.83 | ||||||||
More than 10 years | 54,219 | 6.78 | ||||||||
Equity securities | 112,806 | 4.63 | ||||||||
Mortgage-backed securities | 1,006,728 | 4.22 | ||||||||
Total | $ | 2,958,320 | 4.21 | % | ||||||
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Table 9 | Loans by Type |
December 31, | |||||||||||||||||||||||||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||
Amount | % * | Amount | % * | Amount | % * | Amount | % * | Amount | % * | ||||||||||||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||||||||||||||||
Commercial, financial, and agricultural | $ | 5,231,150 | 24.5 | % | 5,064,828 | 26.0 | % | 4,651,864 | 28.3 | % | 4,382,558 | 30.3 | 4,004,042 | 32.2 | |||||||||||||||||||||||||||||
Real estate — construction | 6,394,161 | 29.9 | 5,173,275 | 26.6 | 3,958,649 | 24.1 | 3,119,508 | 21.6 | 2,665,877 | 21.5 | |||||||||||||||||||||||||||||||||
Real estate — mortgage | 6,465,915 | 30.1 | 6,116,308 | 31.4 | 5,095,247 | 30.9 | 4,304,024 | 29.8 | 3,138,748 | 25.3 | |||||||||||||||||||||||||||||||||
Total commercial | 18,091,226 | 84.5 | 16,354,411 | 84.0 | 13,705,760 | 83.2 | 11,806,090 | 81.7 | 9,808,667 | 79.0 | |||||||||||||||||||||||||||||||||
Retail: | |||||||||||||||||||||||||||||||||||||||||||
Real estate — mortgage | 2,559,339 | 12.0 | 2,298,681 | 11.8 | 1,865,700 | 11.4 | 1,701,332 | 11.8 | 1,553,154 | 12.5 | |||||||||||||||||||||||||||||||||
Consumer loans — credit card | 268,348 | 1.3 | 256,298 | 1.3 | 232,931 | 1.4 | 223,613 | 1.5 | 234,651 | 1.9 | |||||||||||||||||||||||||||||||||
Consumer loans — other | 521,521 | 2.4 | 612,957 | 3.1 | 691,557 | 4.2 | 757,625 | 5.2 | 843,169 | 6.8 | |||||||||||||||||||||||||||||||||
Total retail | 3,349,208 | 15.7 | 3,167,936 | 16.2 | 2,790,188 | 17.0 | 2,682,570 | 18.5 | 2,630,974 | 21.2 | |||||||||||||||||||||||||||||||||
Total loans | 21,440,434 | 19,522,347 | 16,495,948 | 14,488,660 | 12,439,641 | ||||||||||||||||||||||||||||||||||||||
Unearned income | (48,087 | ) | (0.2 | ) | (41,951 | ) | (0.2 | ) | (31,034 | ) | (0.2 | ) | (24,752 | ) | (0.2 | ) | (21,724 | ) | (0.2 | ) | |||||||||||||||||||||||
Total loans, net of unearned income | 21,392,347 | 100.0 | 19,480,396 | 100.0 | 16,464,914 | 100.0 | 14,463,908 | 100.0 | 12,417,917 | 100.0 | |||||||||||||||||||||||||||||||||
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Table 10 | Loan Maturity and Interest Rate Sensitivity |
December 31, 2005 | ||||||||||||||||||
Over One Year | Over | |||||||||||||||||
One Year | Through Five | Five | ||||||||||||||||
Or Less | Years | Years | Total | |||||||||||||||
Selected loan categories: | ||||||||||||||||||
Commercial, financial, and agricultural | $ | 3,303,374 | 1,701,029 | 226,747 | 5,231,150 | |||||||||||||
Real estate-construction | 4,530,379 | 1,749,157 | 114,625 | 6,394,161 | ||||||||||||||
Total | $ | 7,833,753 | 3,450,186 | 341,372 | 11,625,311 | |||||||||||||
Loans due after one year: | ||||||||||||||||||
Having predetermined interest rates | $ | 1,228,005 | ||||||||||||||||
Having floating interest rates | 2,563,553 | |||||||||||||||||
Total | $ | 3,791,558 | ||||||||||||||||
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Table 11 | Allowance for Loan Losses |
December 31, | |||||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||
Allowance for loan losses at beginning of year | $ | 265,745 | 226,059 | 199,841 | 170,769 | 147,867 | |||||||||||||||||
Allowance for loan losses of acquired/divested subsidiaries, net | — | 5,615 | 10,534 | 7,967 | 6,217 | ||||||||||||||||||
Loans charged off: | |||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||
Commercial, financial, and agricultural | 38,087 | 30,697 | 37,535 | 28,338 | 17,806 | ||||||||||||||||||
Real estate — construction | 1,367 | 383 | 2,918 | 444 | 307 | ||||||||||||||||||
Real estate — mortgage | 6,575 | 3,145 | 2,533 | 1,745 | 1,294 | ||||||||||||||||||
Total commercial | 46,029 | 34,225 | 42,986 | 30,527 | 19,407 | ||||||||||||||||||
Retail: | |||||||||||||||||||||||
Real estate — mortgage | 4,393 | 2,327 | 2,972 | 1,375 | 1,750 | ||||||||||||||||||
Consumer loans — credit card | 11,383 | 7,728 | 7,631 | 10,408 | 11,579 | ||||||||||||||||||
Consumer loans — other | 5,421 | 6,688 | 10,616 | 8,951 | 9,069 | ||||||||||||||||||
Total retail | 21,197 | 16,743 | 21,219 | 20,734 | 22,398 | ||||||||||||||||||
Total loans charged off | 67,226 | 50,968 | 64,205 | 51,261 | 41,805 | ||||||||||||||||||
Recoveries on loans previously charged off: | |||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||
Commercial, financial, and agricultural | 3,890 | 5,334 | 3,454 | 2,512 | 2,448 | ||||||||||||||||||
Real estate — construction | 50 | 172 | 189 | 50 | 38 | ||||||||||||||||||
Real estate — mortgage | 483 | 826 | 325 | 284 | 132 | ||||||||||||||||||
Total commercial | 4,423 | 6,332 | 3,968 | 2,846 | 2,618 | ||||||||||||||||||
Retail: | |||||||||||||||||||||||
Real estate — mortgage | 511 | 521 | 330 | 346 | 680 | ||||||||||||||||||
Consumer loans — credit card | 1,828 | 1,612 | 1,467 | 1,554 | 1,166 | ||||||||||||||||||
Consumer loans — other | 1,799 | 1,255 | 2,347 | 2,293 | 2,353 | ||||||||||||||||||
Total retail | 4,138 | 3,388 | 4,144 | 4,193 | 4,199 | ||||||||||||||||||
Total loans recovered | 8,561 | 9,720 | 8,112 | 7,039 | 6,817 | ||||||||||||||||||
Net loans charged off | 58,665 | 41,248 | 56,093 | 44,222 | 34,988 | ||||||||||||||||||
Provision expense | 82,532 | 75,319 | 71,777 | 65,327 | 51,673 | ||||||||||||||||||
Allowance for loan losses at end of year | $ | 289,612 | 265,745 | 226,059 | 199,841 | 170,769 | |||||||||||||||||
Allowance for loan losses to loans, net of unearned income | 1.35 | % | 1.36 | 1.37 | 1.38 | 1.38 | |||||||||||||||||
Ratio of net loans charged off to average loans outstanding, net of unearned income | 0.29 | % | 0.23 | 0.36 | 0.33 | 0.30 | |||||||||||||||||
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Table 12 | Allocation of Allowance for Loan Losses |
December 31, | ||||||||||||||||||||||||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||||||||||||||||||||||||
Amount | % * | Amount | % * | Amount | % * | Amount | % * | Amount | % * | |||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||||||
Commercial, financial, and agricultural | $ | 83,995 | 24.5 | 77,293 | 25.9 | 66,418 | 28.1 | 67,365 | 30.2 | 70,166 | 32.2 | |||||||||||||||||||||||||||||||
Real estate — construction | 59,869 | 29.9 | 50,224 | 26.6 | 39,921 | 24.1 | 26,476 | 21.6 | 23,368 | 21.5 | ||||||||||||||||||||||||||||||||
Real estate — mortgage | 69,334 | 30.1 | 66,954 | 31.4 | 51,140 | 30.9 | 40,334 | 29.8 | 25,754 | 25.3 | ||||||||||||||||||||||||||||||||
Total commercial | 213,198 | 84.5 | 194,471 | 83.9 | 157,479 | 83.1 | 134,175 | 81.6 | 119,288 | 79.0 | ||||||||||||||||||||||||||||||||
Retail: | ||||||||||||||||||||||||||||||||||||||||||
Real estate — mortgage | 6,445 | 12.0 | 5,335 | 11.8 | 4,032 | 11.3 | 3,951 | 11.8 | 1,503 | 12.5 | ||||||||||||||||||||||||||||||||
Consumer loans — credit card | 8,733 | 1.3 | 8,054 | 1.4 | 7,602 | 1.5 | 8,800 | 1.6 | 9,803 | 1.9 | ||||||||||||||||||||||||||||||||
Consumer loans — other | 8,403 | 2.4 | 7,086 | 3.1 | 8,006 | 4.3 | 9,590 | 5.2 | 15,268 | 6.8 | ||||||||||||||||||||||||||||||||
Total retail | 23,581 | 15.7 | 20,475 | 16.3 | 19,640 | 17.1 | 22,341 | 18.6 | 26,574 | 21.2 | ||||||||||||||||||||||||||||||||
Unearned Income | (0.2 | ) | (0.2 | ) | (0.2 | ) | (0.2 | ) | (0.2 | ) | ||||||||||||||||||||||||||||||||
Unallocated | 52,833 | 50,799 | 48,940 | 43,325 | 24,907 | |||||||||||||||||||||||||||||||||||||
Total allowance for loan losses | $ | 289,612 | 100.0 | 265,745 | 100.0 | 226,059 | 100.0 | 199,841 | 100.0 | 170,769 | 100.0 | |||||||||||||||||||||||||||||||
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December 31, | |||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||
Nonperforming loans(a) | $ | 82,175 | 80,456 | 67,442 | 66,736 | 51,586 | |||||||||||||||
Other real estate | 16,500 | 21,492 | 28,422 | 26,517 | 15,867 | ||||||||||||||||
Nonperforming assets | $ | 98,675 | 101,948 | 95,864 | 93,253 | 67,453 | |||||||||||||||
Loans 90 days past due and still accruing interest | |||||||||||||||||||||
Total outstanding | $ | 16,023 | 18,138 | 21,138 | 30,192 | 27,134 | |||||||||||||||
As a % of loans | 0.07 | % | 0.09 | 0.13 | 0.21 | 0.22 | |||||||||||||||
Allowance for loan losses | $ | 289,612 | 265,745 | 226,059 | 199,841 | 170,769 | |||||||||||||||
Allowance for loan losses as a % of loans | 1.35 | % | 1.36 | 1.37 | 1.38 | 1.38 | |||||||||||||||
As a % of loans and other real estate: | |||||||||||||||||||||
Nonperforming loans | 0.38 | % | 0.41 | 0.41 | 0.46 | 0.41 | |||||||||||||||
Other real estate | 0.08 | % | 0.11 | 0.17 | 0.18 | 0.13 | |||||||||||||||
Nonperforming assets | 0.46 | % | 0.52 | 0.58 | 0.64 | 0.54 | |||||||||||||||
Allowance for loan losses to nonperforming loans | 352.43 | % | 330.30 | 335.19 | 299.45 | 331.04 | |||||||||||||||
2005 | 2004 | 2003 | |||||||||||
Interest at contractual rates(b) | $ | 5,205 | 4,197 | 4,547 | |||||||||
Less interest recorded as income | 2,713 | 1,537 | 1,884 | ||||||||||
Reduction of interest income | $ | 2,492 | 2,660 | 2,663 | |||||||||
(a) | Nonperforming loans exclude loans 90 days past due and still accruing interest. | |
(b) | Interest income that would have been recorded if the loans had been current and performing in accordance with their original terms. |
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December 31, 2005 | December 31, 2004 | ||||||||||||||||
Nonperforming | Nonperforming | ||||||||||||||||
Loans as a | Loans as a | Loans as a | Loans as a | ||||||||||||||
Percentage | Percentage | Percentage | Percentage | ||||||||||||||
of Total | of Total | of Total | of Total | ||||||||||||||
Loans | Nonperforming | Loans | Nonperforming | ||||||||||||||
Loan Type | Outstanding | Loans | Outstanding | Loans | |||||||||||||
Commercial Real Estate | |||||||||||||||||
Multi-family | 2.5 | % | 0.3 | 2.8 | % | 1.0 | |||||||||||
Hotels | 3.2 | — | 4.2 | 3.6 | |||||||||||||
Office buildings | 3.5 | 6.1 | 4.0 | — | |||||||||||||
Shopping centers | 3.1 | — | 3.0 | 0.2 | |||||||||||||
Commercial development | 4.1 | 0.7 | 3.5 | 0.1 | |||||||||||||
Other investment property | 1.6 | 0.8 | 1.4 | 0.1 | |||||||||||||
Total Investment Properties | 18.0 | 7.9 | 18.9 | 5.0 | |||||||||||||
1-4 family construction | 7.3 | 2.4 | 6.2 | 1.1 | |||||||||||||
1-4 family perm/mini-perm | 5.1 | 3.3 | 5.1 | 8.2 | |||||||||||||
Residential development | 7.0 | 9.3 | 5.6 | 0.2 | |||||||||||||
Total 1-4 Family Properties | 19.4 | 15.0 | 16.9 | 9.5 | |||||||||||||
Land Acquisition | 4.9 | 0.5 | 4.8 | 0.2 | |||||||||||||
Total Investment-Related Real Estate | 42.3 | 23.4 | 40.6 | 14.7 | |||||||||||||
Owner-Occupied | 12.6 | 13.7 | 11.6 | 8.8 | |||||||||||||
Other Property | 5.1 | 6.6 | 5.8 | 9.8 | |||||||||||||
Total Commercial Real Estate | 60.0 | 43.7 | 58.0 | 33.3 | |||||||||||||
Commercial & Industrial | 24.5 | 46.6 | 25.9 | 58.1 | |||||||||||||
Consumer | 15.7 | 9.7 | 16.3 | 8.6 | |||||||||||||
Unearned Income | (0.2 | ) | — | (0.2 | ) | — | |||||||||||
Total | 100.0 | % | 100.0 | 100.0 | % | 100.0 | |||||||||||
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2005 | % * | 2004 | % * | 2003 | % * | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Non-interest bearing demand deposits | $ | 3,408,289 | 17.4 | 3,048,465 | 17.9 | 2,501,539 | 16.6 | ||||||||||||||||||
Interest bearing demand deposits | 2,975,016 | 15.2 | 2,762,104 | 16.2 | 2,515,161 | 16.7 | |||||||||||||||||||
Money market accounts | 5,193,943 | 26.5 | 4,481,042 | 26.3 | 3,695,601 | 24.6 | |||||||||||||||||||
Savings deposits | 555,205 | 2.8 | 548,736 | 3.2 | 502,246 | 3.3 | |||||||||||||||||||
Time deposits under $100,000 | 2,294,158 | 11.7 | 2,223,854 | 13.0 | 2,399,371 | 15.9 | |||||||||||||||||||
Time deposits $100,000 and over | 2,624,623 | 13.4 | 2,258,081 | 13.2 | 2,722,584 | 18.1 | |||||||||||||||||||
17,051,234 | 87.0 | 15,322,282 | 89.8 | 14,336,502 | 95.2 | ||||||||||||||||||||
Brokered time deposits ($100,000 and over) | 2,557,660 | 13.0 | 1,730,937 | 10.2 | 726,316 | 4.8 | |||||||||||||||||||
Total average deposits | $ | 19,608,894 | 100.0 | 17,053,219 | 100.0 | 15,062,818 | 100.0 | ||||||||||||||||||
Table 16 | Maturity Distribution of Time Deposits of $100,000 or More |
December 31, 2005 | |||||
3 months or less | $ | 1,353,327 | |||
Over 3 months through 6 months | 1,048,691 | ||||
Over 6 months through 12 months | 1,263,435 | ||||
Over 12 months | 1,571,041 | ||||
Total outstanding | $ | 5,236,494 | |||
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Table 17 | Twelve Month Net Interest Income Sensitivity |
Change in | Estimated | |||||
Short-Term | Change in | |||||
Interest Rates | Net Interest | |||||
(In basis points) | Income | |||||
+ 200 | 4.4 | % | ||||
+ 100 | 1.9 | % | ||||
Flat | — | |||||
- 100 | (2.2 | )% | ||||
- 200 | (4.8 | )% |
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Table 18 | Interest Rate Sensitivity |
December 31, 2005 | ||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||
0-3 | 4-12 | 1-5 | Over 5 | |||||||||||||||
Months | Months | Years | Years | |||||||||||||||
Investment securities available for sale* | $ | 273.1 | 417.5 | 1,886.1 | 428.0 | |||||||||||||
Loans, net of unearned income | 15,258.6 | 2,091.7 | 3,569.1 | 473.0 | ||||||||||||||
Mortgage loans held for sale | 143.1 | — | — | — | ||||||||||||||
Other | 99.2 | — | — | — | ||||||||||||||
Interest sensitive assets | 15,774.0 | 2,509.2 | 5,455.2 | 901.0 | ||||||||||||||
Deposits | 7,902.8 | 3,780.6 | 4,885.8 | 514.4 | ||||||||||||||
Other borrowings | 1,851.2 | 110.6 | 236.9 | 893.6 | ||||||||||||||
Interest sensitive liabilities | 9,754.0 | 3,891.2 | 5,122.7 | 1,408.0 | ||||||||||||||
Interest rate swaps | (1,107.5 | ) | 295.0 | 395.0 | 417.5 | |||||||||||||
Interest sensitivity gap | $ | 4,912.5 | (1,087.0 | ) | 727.5 | (89.5 | ) | |||||||||||
Cumulative interest sensitivity gap | $ | 4,912.5 | 3,825.5 | 4,553.0 | 4,463.5 | |||||||||||||
Cumulative interest sensitivity gap as a percentage of total interest sensitive assets | 19.9 | % | 15.5 | 18.5 | 18.1 | |||||||||||||
December 31, 2004 | ||||||||||||||||||
0-3 | 4-12 | 1-5 | Over 5 | |||||||||||||||
Months | Months | Years | Years | |||||||||||||||
Investment securities available for sale* | $ | 287.7 | 249.6 | 1,659.8 | 498.7 | |||||||||||||
Loans, net of unearned income | 13,800.4 | 1,965.9 | 3,337.3 | 376.9 | ||||||||||||||
Mortgage loans held for sale | 120.2 | — | — | — | ||||||||||||||
Other | 139.5 | — | — | — | ||||||||||||||
Interest sensitive assets | 14,347.8 | 2,215.5 | 4,997.1 | 875.6 | ||||||||||||||
Deposits | 7,326.8 | 2,693.3 | 4,640.7 | 578.8 | ||||||||||||||
Other borrowings | 1,870.0 | 329.6 | 390.8 | 497.3 | ||||||||||||||
Interest sensitive liabilities | 9,196.8 | 3,022.9 | 5,031.5 | 1,076.1 | ||||||||||||||
Interest rate swaps | (977.5 | ) | 300.0 | 330.0 | 347.5 | |||||||||||||
Interest sensitivity gap | $ | 4,173.5 | (507.4 | ) | 295.6 | 147.0 | ||||||||||||
Cumulative interest sensitivity gap | $ | 4,173.5 | 3,666.1 | 3,961.7 | 4,108.7 | |||||||||||||
Cumulative interest sensitivity gap as a percentage of total interest sensitive assets | 18.6 | % | 16.3 | 17.7 | 18.3 | |||||||||||||
* | Excludes net unrealized losses of $46.3 million and net unrealized losses of $224 thousand at December 31, 2005 and 2004, respectively. |
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Table 19 | Interest Rate Contracts |
Weighted | Weighted | Weighted | Net | ||||||||||||||||||||||||||
(Dollars in thousands) | Average | Average | Average | Unrealized | |||||||||||||||||||||||||
Notional | Receive | Pay | Maturity | Unrealized | Unrealized | Gains | |||||||||||||||||||||||
Amount | Rate | Rate * | In Months | Gains | Losses | (Losses) | |||||||||||||||||||||||
December 31, 2005 | |||||||||||||||||||||||||||||
Receive fixed swaps: | |||||||||||||||||||||||||||||
Fair value hedges | $ | 807,500 | 4.38% | 4.28% | 70 | $ | 1,270 | (14,804 | ) | (13,534 | ) | ||||||||||||||||||
Cash flow hedges | 350,000 | 6.10% | 7.25% | 18 | 117 | (3,667 | ) | (3,550 | ) | ||||||||||||||||||||
Total | $ | 1,157,500 | 4.90% | 5.18% | 54 | $ | 1,387 | (18,471 | ) | (17,084 | ) | ||||||||||||||||||
December 31, 2004 | |||||||||||||||||||||||||||||
Receive fixed swaps: | |||||||||||||||||||||||||||||
Fair value hedges | $ | 477,500 | 4.24% | 2.33% | 88 | $ | 3,435 | (5,214 | ) | (1,779 | ) | ||||||||||||||||||
Cash flow hedges | 500,000 | 5.12% | 5.25% | 12 | — | (4,090 | ) | (4,090 | ) | ||||||||||||||||||||
Sub Total | 977,500 | 4.69% | 3.83% | 49 | 3,435 | (9,304 | ) | (5,869 | ) | ||||||||||||||||||||
Forward starting swap — cash flow hedges | 200,000 | — | — | 123 | 293 | (2,109 | ) | (1,816 | ) | ||||||||||||||||||||
Total | $ | 1,177,500 | $ | 3,728 | (11,413 | ) | (7,685 | ) | |||||||||||||||||||||
* | Variable pay rate based upon contract rates in effect at December 31, 2005 and 2004. |
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Table 20 | Contractual Cash Obligations |
(In thousands) | Payments Due After December 31, 2005 | |||||||||||||||||||
1 Year or Less | Over 1 - 3 Years | 4 - 5 Years | After 5 Years | Total | ||||||||||||||||
Long-term debt | $ | 679,500 | 252,069 | 74,780 | 913,921 | 1,920,270 | ||||||||||||||
Capital lease obligations | 2,296 | 3,844 | 788 | 3,771 | 10,699 | |||||||||||||||
Operating leases | 130,967 | 167,574 | 38,516 | 46,846 | 383,903 | |||||||||||||||
Total contractual cash obligations | $ | 812,763 | 423,487 | 114,084 | 964,538 | 2,314,872 | ||||||||||||||
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Table 21 | Capital Ratios |
December 31, | |||||||||||
2005 | 2004 | ||||||||||
(Dollars in thousands) | |||||||||||
Tier I capital: | |||||||||||
Shareholders’ equity | $ | 2,949,329 | 2,641,289 | ||||||||
Net unrealized loss on investment securities available for sale | 28,495 | 142 | |||||||||
Net unrealized loss on cash flow hedges | 5,674 | 3,434 | |||||||||
Disallowed intangibles | (532,295 | ) | (457,976 | ) | |||||||
Disallowed deferred tax asset | (6,939 | ) | (6,075 | ) | |||||||
Deferred tax liability on core deposit premium related to acquisitions | 9,215 | 10,937 | |||||||||
Minority interest | 196,973 | 167,284 | |||||||||
Qualifying trust preferred securities | 10,252 | 10,297 | |||||||||
Total Tier I capital | 2,660,704 | 2,369,332 | |||||||||
Tier II capital: | |||||||||||
Qualifying subordinated debt | 750,000 | 300,000 | |||||||||
Eligible portion of the allowance for loan losses | 289,612 | 265,745 | |||||||||
Total Tier II capital | 1,039,612 | 565,745 | |||||||||
Total risk-based capital | $ | 3,700,316 | 2,935,077 | ||||||||
Total risk-adjusted assets | $ | 26,008,796 | 23,590,520 | ||||||||
Tier I capital ratio | 10.23 | % | 10.04 | ||||||||
Total risk-based capital ratio | 14.23 | 12.44 | |||||||||
Leverage ratio | 9.99 | 9.78 | |||||||||
Regulatory minimums (for well-capitalized status): | |||||||||||
Tier I capital ratio | 6.00 | % | 6.00 | ||||||||
Total risk-based capital ratio | 10.00 | 10.00 | |||||||||
Leverage ratio | 5.00 | 5.00 | |||||||||
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Table 22 | Market and Stock Price Information |
High | Low | ||||||||
2005 | |||||||||
Quarter ended December 31, 2005 | $ | 28.42 | 26.49 | ||||||
Quarter ended September 30, 2005 | 29.95 | 27.02 | |||||||
Quarter ended June 30, 2005 | 29.49 | 26.98 | |||||||
Quarter ended March 31, 2005 | 28.51 | 26.59 | |||||||
2004 | |||||||||
Quarter ended December 31, 2004 | $ | 28.89 | 26.50 | ||||||
Quarter ended September 30, 2004 | 26.50 | 24.49 | |||||||
Quarter ended June 30, 2004 | 25.75 | 23.31 | |||||||
Quarter ended March 31, 2004 | 28.82 | 22.67 | |||||||
Table 23 | Dividends |
Per Share | |||||||||
Date Declared | Date Paid | Amount | |||||||
2005 | |||||||||
November 15, 2005 | January 2, 2006 | $ | .1825 | ||||||
August 16, 2005 | October 1, 2005 | .1825 | |||||||
May 24, 2005 | July 1, 2005 | .1825 | |||||||
February 23, 2005 | April 1, 2005 | .1825 | |||||||
2004 | |||||||||
November 16, 2004 | January 3, 2005 | $ | .1733 | ||||||
August 19, 2004 | October 1, 2004 | .1733 | |||||||
May 19, 2004 | July 1, 2004 | .1733 | |||||||
February 26, 2004 | April 1, 2004 | .1733 | |||||||
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Table 24 | Short-Term Borrowings |
2005 | 2004 | 2003 | ||||||||||
(Dollars in thousands) | ||||||||||||
Balance at December 31 | $ | 1,158,669 | 1,208,080 | 1,354,887 | ||||||||
Weighted average interest rate at December 31 | 3.69 | % | 1.95 | % | 0.93 | % | ||||||
Maximum month end balance during the year | $ | 1,918,797 | 1,749,923 | 1,459,818 | ||||||||
Average amount outstanding during the year | $ | 1,103,005 | 1,479,815 | 1,101,216 | ||||||||
Weighted average interest rate during the year | 2.86 | % | 1.30 | % | 1.07 | % | ||||||
Maximum | |||||||||||||||||
Number of | |||||||||||||||||
Total Number of | Shares That | ||||||||||||||||
Total | Shares Purchased | May Yet Be | |||||||||||||||
Number | as Part of Publicly | Purchased | |||||||||||||||
of Shares | Average Price | Announced Plans | Under the Plans | ||||||||||||||
Month | Purchased | Paid per Share | or Programs | or Programs | |||||||||||||
October 2005 | — | $ | — | — | — | (2) | |||||||||||
November 2005 | — | — | — | — | (2) | ||||||||||||
December 2005 | 726 | (1) | 28.21 | — | — | (2) | |||||||||||
Total | 726 | (1) | $ | 28.21 | — | — | (2) | ||||||||||
(1) | Consists of delivery of previously owned shares to Synovus in payment of the exercise price of stock options. |
(2) | Amount is now zero as the aforementioned share repurchase plan expired on April 14, 2005. |
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(In thousands, except per share data) | Fourth | Third | Second | First | |||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
2005 | |||||||||||||||||
Interest income | $ | 419,332 | 386,412 | 359,175 | 331,306 | ||||||||||||
Net interest income | 260,095 | 244,825 | 237,065 | 226,862 | |||||||||||||
Provision for losses on loans | 20,787 | 19,639 | 22,823 | 19,283 | |||||||||||||
Income before income taxes | 218,309 | 215,845 | 204,251 | 185,617 | |||||||||||||
Net income | 137,260 | 133,992 | 128,460 | 116,734 | |||||||||||||
Net income per share, basic | .44 | .43 | .41 | .38 | |||||||||||||
Net income per share, diluted | .44 | .43 | .41 | .37 | |||||||||||||
2004 | |||||||||||||||||
Interest income | $ | 312,316 | 299,747 | 277,266 | 269,691 | ||||||||||||
Net interest income | 224,036 | 223,434 | 210,462 | 202,747 | |||||||||||||
Provision for losses on loans | 20,855 | 21,192 | 17,548 | 15,724 | |||||||||||||
Income before income taxes | 185,289 | 173,349 | 166,102 | 164,541 | |||||||||||||
Net income | 118,722 | 109,008 | 105,141 | 104,162 | |||||||||||||
Net income per share, basic | .38 | .35 | .34 | .34 | |||||||||||||
Net income per share, diluted | .38 | .35 | .34 | .34 | |||||||||||||
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EXECUTIVE CASH BONUS PLAN
(i) | performance objectives for such and/or the succeeding fiscal year for the Company, any Subsidiary, or any business segment or business unit of |
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the Company or any Subsidiary, based upon such criteria as may be from time to time considered by the Committee, which criteria may include, not to the exclusion of other criteria, criteria that has been approved by the shareholders of the Company or the shareholders of any publicly-traded Subsidiary of the Company; and | ||
(ii) | a system which equates the attainment of various performance objectives by the Company and Subsidiaries for such and/or the succeeding fiscal year into various percentages of the base salaries of eligible officers of the Company and Subsidiaries for such and/or the succeeding fiscal year which may be awarded to such Employees who are selected to be Participants in the Plan as bonuses. |
2
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3
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1. | To elect the following individuals as directors to serve until the Annual Meeting of Shareholders in 2009: | For o | Withhold o | For All Except o |
(01) Richard Y. Bradley | ||
(02) Frank W. Brumley | (05) John P. Illges, III | |
(03) Elizabeth W. Camp | (06) J. Neal Purcell | |
(04) T. Michael Goodrich | (07) William B. Turner, Jr. |
2. | To amend Synovus’ Articles of Incorporation and bylaws to declassify the Board of Directors. | For o | Against o | Abstain o | ||||
3. | To approve the Synovus Financial Corp. Executive Cash Bonus Plan. | For o | Against o | Abstain o | ||||
4. | To ratify the appointment of KPMG LLP as Synovus’ independent auditor for the year 2006. | For o | Against o | Abstain o | ||||
5. | To consider a shareholder proposal regarding director election by majority vote. | For o | Against o | Abstain o | ||||
Mark Here for Address Change or Comments SEE REVERSE SIDE | o |
INSTRUCTIONS: Please provide the required information. THIS CERTIFICATE MUST BE SIGNED TO BE VALID. If you do not complete and sign this Certificate of Beneficial Owner, your shares covered by the Proxy to the left will be voted on the basis of one vote per share.
A. Are you the beneficial owner, in all capacities, of more than 1,139,063 shares of Synovus Common Stock? If you answered “No” to Question A, do not answer B or C. Your shares represented by the Proxy to the left are entitled to ten votes per share. | Yes o | No o | ||
B. If your answer to question A was “Yes”, have you acquired more than 1,139,063 shares of Synovus Common Stock since February 21, 2002 (including shares received as a stock dividend)? If you answered “No” to Question B, do not answer Question C. Your shares represented by the Proxy to the left are entitled to ten votes per share. | Yes o | No o | ||
To the best of my knowledge and belief, the information provided herein is true and correct. I understand that the Board of Directors of Synovus Financial Corp. may require me to provide additional information or evidence to document my beneficial ownership of these shares and I agree to provide such evidence if so requested. |
Shareholder sign here | Date | Shareholder sign here | Date | |||||||||||
Co-owner sign here | Date | Co-owner sign here | Date |
Sign Here to Vote Your Shares | Sign Here to Certify Your Shares |
plan statements, tax documents and more. Simply log on toInvestor ServiceDirect(R) at
www.melloninvestor.com/isd where step-by-step instructions will prompt you through enrollment.
Internet and telephone voting are available through 11:59 PM Eastern Time
the day prior to annual meeting day.
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same manner as if you marked, signed and returned your proxy card.
Internet | Telephone | |||||||
http://www.proxyvoting.com/snv | 1-866-540-5760 | |||||||
Use the Internet to vote your proxy. Have your proxy card in hand when you access the web site. | OR | Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | OR | Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. | ||||
you do NOT need to mail back your proxy card.
on the Internet at www.synovus.com/annual2005
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POST OFFICE BOX 120, COLUMBUS, GEORGIA 31902-0120
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 27, 2006